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Trump Announces Sweeping Reciprocal Tariffs; Massive U.S. Solar Energy Plant Shutting Down; Dozens Injured After Car Drives Into Crowd in Munich. Aired 2-2:30p ET

Aired February 13, 2025 - 14:00   ET

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

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BORIS SANCHEZ, CNN HOST: Right now in the Oval Office, President Trump is announcing a new round of tariffs. We're going to bring you his remarks and explain what it could all mean for you.

BRIANNA KEILAR, CNN HOST: Plus, scores of employees are being fired across federal agencies, among them the Department of Education and the Small Business Administration. Much more in the fallout from President Trump and Elon Musk's reshaping of the federal government.

And it went from being the future of solar energy to a, quote, financial boondoggle. Why the owners of a massive field of solar panels are closing up shop. We're following these developing stories and many more all coming in right here to CNN News Central.

We begin with breaking news out of the White House. President Trump is signing sweeping new executive order in the Oval Office and he's calling this the big one, reciprocal tariffs.

SANCHEZ: Let's bring in Richard Quest, CNN Business Editor at Large, an anchor of CNN's Quest Means Business. Richard, what are you anticipating will be the impact of these reciprocal tariffs?

RICHARD QUEST: CNN BUSINESS EDITOR AT LARGE: Well, these are the bit -- this is the big one, excuse me, in a way, much more so than the Canada, Mexico bilaterals or the Chinese ones because they had other purposes, fentanyl, immigration. But this is designed to change the balance of terms of trade. This is designed to rebalance at least towards the U.S. favor when it comes to doing international trade, because the United States does have one of the lowest average import tariffs. It's around 2, 2.5% depending on the actual goods and services.

In many, many other cases, other countries charge the U.S. more. And there's strong reasons in some cases, they could be deliberate. They could have very restricted economies. They could need the revenue, all sorts of reasons. But the U.S. is saying enough.

And there is good, strong reason for doing so because the U.S. has been the market where many countries like to dump their industrial goods because it is such an exciting vibrant market. And Donald Trump is saying, nope, we will do tit for tat. If you charge us, we'll charge you. And guys, what the test here is going to be how they calculate, what they calculate and how they do it.

KEILAR: And the tariffs aren't going to kick in immediately. How much does that matter in terms of this maybe being sort of a stick that the President is going to wave around? What do you think?

QUEST: And a (inaudible). Absolutely. Because this is very clever. This is, I mean, this is the right way to do it. Reciprocal tariffs are not the greatest evil of, say, punitive tariffs. This is basically saying, you've done this to us, we're going to do the same to you. And the way you do it, and I think they're doing it the right way, is my early understanding.

You give time for the other countries to respond and say, okay, we'll take the tariff off, we'll reduce it, we'll agree to do this, that or the other. Because the effect, and this is core to understand, if these tariffs go into effect, that means the exporting country will pay the money to the U.S. treasury and then they'll pass the cost on to the U.S. consumer. And so it's a matter of how it's engineered.

In an ideal world, you want the ideal scenario? The ideal scenario is Donald Trump says, I'm going to slap this tariff on unless you take your tariff off. They take the tariff off, you don't put the tariff on. Win-win, that's how it should work.

[14:05:02]

SANCHEZ: I wonder, Richard, where you think these tariffs are going to sting the hardest and whether you think it's any coincidence that a couple of hours after this signing or the announcement of these tariffs, he's going to be meeting with Prime Minister Modi of India, which as you know, slaps about a 10% tariff on U.S. goods being imported to that country, right?

QUEST: And has an overall tariff rate, an average tariff rate of over 10%. So it'll be an uncomfortable conversation. If Modi hasn't traveled with a bag of give ups ready to offer up to the President. I would imagine it will be a short, short shrift of a conversation. But to give you a perspective, Germany has an average tariff of 1.3%, Japan tariff 2.3%, the U.S. 2.3. But listen to those that are really big. Bermuda, 35%, Congo, 18%. Now, these are closed economies where they're really trying to protect their economy from foreign competition.

What the President's trying to do, and I think it's a very -- it's more -- it's a blunt but more sophisticated way than he's done with China and Canada and Mexico so far, is to say we're going to target, you're going to have the chance to withdraw your tariff and only then will we slap it on. And if we do slap it on, well, then I'm afraid the American consumer will end up paying the bill. That's the downside that he won't be telling you.

SANCHEZ: Richard Quest, thank you so much for the analysis. Appreciate it. President Trump and Elon Musk's efforts to drastically downsize the federal government appear to be entering a new phase. We've learned that the administration has begun firing scores of probationary employees. These are relatively new hires at the Department of Education and at the Small Business Administration.

KEILAR: And until now, the Trump administration had only been placing federal employees on administrative leave. CNN's Rene Marsh is with us now on this story. What more do we know about just how many, how broad these layoffs or firings are?

RENE MARSH, CNN CORRESPONDENT: So we have been close contact with the union and at this point they don't even have totals. And they are actually expecting to hear from even more employees. But what we do know is that we're hearing from employees and union members at Department of Education Small Business Administration. Again, we're starting to hear from other agencies as well.

But who are some of these individuals and what divisions do they work in at the Department of Education offices like the General Counsel's office, the Special Education and Rehabilitation Services Office, and Federal Student Aid Office. We even obtained a letter that one of these employees received, essentially telling them that they were terminated.

I'm just wanting to read a line from that. And in that letter, it says that the agency finds, based on your performance, that you have not demonstrated that your further employment at the agency would be in the public interest. So just a sampling of the language that some of these employees are receiving, of course, these firings, again, as you point out, this is a new, new phase. And we certainly believe that this is maybe the beginning of the new phase. And we are going to likely hear about more of these firings.

And again, many of these are probationary employees. We're also aware of this OPM memo in which they instructed agencies, hey, don't get rid of all the probationary employees. Also focus on the low performers. So we may see a mix here, but for many of the employees that we've heard about, many of them are indeed probationary.

And just starting to get text messages from people who, you know, within the federal government, their friends. And it is an emotional time as they're starting to get these letters, not that you're on leave that you are out of a job. And so emotions are high and they're obviously concerned about their families. And some of these federal workers come from a household where both mom and dad, husband and wife, are both in the federal government. So difficult time for many of these individuals.

KEILAR: Yeah, certainly is. Rene Marsh, thank you so much. Joining us now to talk more about this, we have Republican Congressman Warren Davidson of Ohio. He is also on the Foreign Affairs Committee. Sir, thank you so much for making time for us. Do you have concerns that reciprocal tariffs, especially when coupled with all of these other tariffs that Trump is proposing, that they could be inflationary? REP. WARREN DAVIDSON, (R) OHIO: Well, just like your previous guest said, the goal is to get fair treatment for American companies. You know, prior to coming to Congress, I own manufacturing companies.

And look it's a great sector, it's a strong, you know, component of America's economy.

[14:10:04]

But a lot of times we're not competing against foreign companies, we're competing against foreign countries. That's particularly true in China.

And the other thing that your previous guest didn't mention, it's not just the tariff level, it's, you have a value added tax at the border. So the average European value added tax is north of 20%. So whatever the tariff level is, you can essentially add 20% to that.

I think around the world there may be 15 to 22% in the range for this value added tax. So everything coming across the border is another 20 to 25% higher. In the U.S., you know, we're averaging about 3% at our border. We don't have a value added tax. So that's a huge comparative advantage. And Donald Trump's trying to close that gap.

KEILAR: And I think the hope -- certainly the hope of Wall Street is that ultimately these will not go through. I wonder then what you think the negotiating value is in threatening tariffs that ultimately may not go through because Trump promised to lower prices for Americans. Every economist says that tariffs will do the opposite. Do you have any concerns that Trump may be in danger of ignoring what may be the most critical message from his election, especially after these new inflation numbers that we've seen?

DAVIDSON: No, I mean, he's picking up right where he left off. And this worked great in his first term. It did improve conditions for our domestic producers. And when that happens, you actually have more job openings, earnings in the organic economy, not the government sector, the private sector.

And you see, you know, one of the best ways to combat inflation is to raise wages, real wages, post inflation. So the purchasing power of your take home pay going up is another way to do it. And so this really gets after both sides.

Ideally, you know, the people that we're negotiating with go, yeah, okay, we've kind of had a better deal than you guys have. And okay, well, meet in the middle, will work something out. But in the worst case, okay, fine, then we'd see more domestic production, you see more switching costs so that the American producer now has a better chance to grow their supply and their market share. And that drives up wages and job opportunities here in our own economy.

KEILAR: Worst case scenario, the expectation is tariffs would get passed on to consumers. You have Senator Mitch McConnell from your neighboring state warning in an op-ed today that Kentuckians can't afford the high cost of Trump's tariffs. He says estimates suggest that Trump's tariffs could cost the average Kentuckian up to twelve hundred dollars a year. Do you worry about that for folks in Ohio?

DAVIDSON: What I worry about is people like Mitch McConnell that spent forever saying no one ever lost in an election because they spent too much money. And this massive federal spending has grown a massive federal government. Thank God for DOGE and the effort to finally lean out our federal government and put more into the private sector.

We're looking at a situation where we have to re privatize our economy and talk about inflation. You've taken way more than that in these terrible trade policies backed by people like Mitch McConnell have given every advantage to China and disadvantaged America. And Donald Trump's really one of the first major elected officials to talk about this and be rewarded with elected office and then be in office and actually do what he said he would do. He worked hard on trade policy.

And as much as Biden talked and complained about the tariffs, they didn't get rid of any of the tariffs. They kept them in place. But unlike President Trump, the Biden administration didn't do anything to actually negotiate and improve our condition, including with China. So Donald Trump's going to pick up right where he left off. And I think it's going to be a better deal for the American consumer, the American worker and investment in our own economy.

KEILAR: So you can guarantee to folks in your state, in your district, that they're not going to see higher prices the likes of which Mitch McConnell is sounding an alarm about in Kentucky?

DAVIDSON: Well, I can't guarantee that, but I know that's not the intent. And I believe that the policies have a better chance to work than a disastrous ignore what China's doing and keep trading with them. That hasn't worked, so why wouldn't we try something different?

KEILAR: I do also want to ask you that you are on armed services, as I mentioned. Do you worry that tariffs, I mean, even ultimately Wall Street is banking on them not going through, like I said, but threatening them against U.S. allies. Do you worry that can undermine U.S. national security when the cooperation of those allies is something the U.S. really depends on?

DAVIDSON: Well, look, I'm the Chairman for National Security and Illicit Finance and talk about undermining our security. You look at some of the things that were exposed with USAID. They were running a color revolution with alternative media trying to undermine Viktor Orban (ph), who's extremely popular --

KEILAR: I'm asking you, Sir, about the tariffs.

DAVIDSON: (Inaudible)

KEILAR: I'm asking you about the tariffs. Can you answer my question about the tariffs in national security?

DAVIDSON: They would rather not have the tariffs.

[14:15:01] They've got a pretty good deal and they would rather not pay their fair share on NATO, but Donald Trump is rightly putting on pressure on them to do really what they already said they would do.

KEILAR: Okay, I'm talking about tariffs. I just want to be clear, not about NATO and the increased payment on that. They have also increased payments, but nonetheless, we're talking about tariffs.

I do want to note, earlier this month you said to notice you went to the U.S. military Academy. Every military academy on the planet would say some version of you're more likely to win any conflict if you multiply your allies than if you multiply your enemies. Why put tariffs on everybody all at once when we could actually build a coalition to go after China?

DAVIDSON: Yeah, that's right. And I think the -- what you see the President doing is setting the conditions to have everyone working in the same direction. Our allies, our closest trading partners, Mexico and Canada are our two biggest trading partners (inaudible) --

KEILAR: By putting tariffs on them

DAVIDSON: (Inaudible). No, no, no --

KEILAR: You think that helps them work in the same direction?

DAVIDSON: Yeah, because at the end of the day, how are they going to help us with China when they won't even treat us fairly? So when we work our differences out amongst ourselves (inaudible) to deal with China. Because China, when they became part of the World Trade Organization, they said they would be a market economy. No one treats China like a market economy because they're not.

They're also treated like a developing economy. They're clearly not a developing economy. And they do the same thing to all of us, not just the United States, but everyone around the world. They use their whole of government approach, their intelligence agencies and everything to steal intellectual property. And then they block market access to their own economy.

And this is incredibly true under Xi Jinping. So the Chinese people are fine, but their government, particularly Xi Jinping, has been a disaster. And we do need this full force of everyone working together to confront China because they're not living up to the World Trade Organization obligations.

KEILAR: Congressman Warren Davidson, thank you so much for being with us.

DAVIDSON: Thank you.

KEILAR: Dozens of churches and religious groups taking the Trump administration to federal court for letting agents make arrests at churches. What we learned from a hearing on the case that just ended here in the last hour. Plus, the Gaza cease fire and hostage deal appears to be back on track. For now, mediators working to resolve a dispute between Hamas and Israel that brought the deal to the brink of collapse.

And then the potential motivation behind a car attack in Germany that injured dozens of people just hours before a meeting of World leaders that included Vice President J.D. Vance. With that and much more coming up on CNN News Central.

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KEILAR: New developments in the Middle East. A source telling CNN that Israeli Prime Minister Benjamin Netanyahu is discussing different military scenarios over fears that the cease fire deal with Hamas could still fall apart. Mediators are working to get the deal back on track after Israel threatened military action.

The next round of hostages were not released by noon this Saturday. Today, Hamas announced that the handover is going to go ahead as planned after accusing Israel of withholding aid to Gaza. CNN's Jeremy Diamond has more details for us from Tel Aviv. Jeremy?

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, a cease fire agreement that just 24 hours ago seemed like it was on the brink of collapse now appears to be getting back on track. Hamas putting out a statement stating that they intend to honor this cease fire agreement and release hostages according to the timetable provided by this agreement. That would mean releasing three hostages this coming Saturday. Israel has yet to officially respond to that statement from Hamas.

And we know that, of course, the Israeli Prime Minister has threatened to go back to the fight in Gaza, go back to war come Saturday if Hamas does not release hostages. But I've spoken with a number of Israeli officials who, while they declined to comment officially on this Hamas statement, they are indicating that there is quite a bit of optimism inside the Israeli government about maintaining this cease fire agreement, indicating that if Hamas goes ahead and releases three hostages as planned this coming Saturday, that Israel will hold up its end of the cease fire agreement.

That would mean releasing Palestinian prisoners in exchange for those hostages and of course, maintaining the cease fire, not going back to war in Gaza. The Israeli Prime Minister, of course, had not said exactly how many hostages would need to be released on Saturday in order to honor Israel's side of this agreement. He certainly didn't go as far as President Trump in saying that all hostages must be released on Saturday.

Israeli officials had previously indicated to us that Israel would need to see nine hostages released. But at this stage, it doesn't appear that Israel is going to be making that demand. We know that the mediators, Egypt and Qatar, have been working to try and resolve this dispute between Israel and Hamas, some of it stemming from Israel, according to Hamas, not allowing in certain shelters into the Gaza Strip.

We know that Israel has said that it has upheld its side of the agreement. But all lies, of course, will be on this Saturday to see if the cease fire holds up and if Hamas releases those hostages. Jeremy Diamond, CNN, Tel Aviv.

SANCHEZ: Our thanks to Jeremy for that report.

Vice President JD Vance is in Germany today meeting with European leaders as part of a major security conference in Munich.

[14:25:01]

That high stakes meeting taking place as investigators search for a motive in a suspected attack this morning. At least 28 people were injured when a car rammed into a crowd of demonstrators. The suspect, believed to be an asylum seeker from Afghanistan, is now in custody. CNN's Sebastian Shukla is in Munich with more details.

SEBASTIAN SHUKLA, CNN FIELD PRODUCER: I'm here at this crossroad in central Munich where you can see that another attack against the German people have taken place, as this white Mini Cooper vehicle plowed into a group of some 28 people on a peaceful protest this morning at around 10:30 a.m. You can see the chaos and destruction that was wrought by it. Those tin foil blankets left strewn on the floor to deliver that emergency first aid and even more disturbingly, what appears to be a child's pushchair.

The police have told us the perpetrator of this attack was a 24-year- old Afghan asylum seeker residing here in Germany. And questions will now start to abound about how an incident like this was allowed to take place given the massive security operation that is going on in this city at the moment with the Munich security conference where we will have heads of state, heads of governments coming here to the city to discuss ironically international security issues.

For Germany though, this will be another reminder that the election that is coming around the corner will force the issue of a migration to the fore one more time and something that the far right will look to seize on and of which German Bavarian politicians here have already said may be an attack. Sebastian Shukla, Munich.

SANCHEZ: Our thanks to Sebastian for that report.

Next, the Senate confirming RFK Jr. as HHS Secretary. But how might his leadership reshape public health in the United States? We're going to talk to a former head of that department.

And from facility of the future to shutting down, why a high tech solar plant out west is now going dark.

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