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China And Canada Respond With New Tariffs On U.S. Goods; Tonight: Trump To Address Congress As Trade Wars Erupt; DOGE Reportedly Using A.I. To Make Cost-Cutting Decisions. Aired 7:30-8a ET

Aired March 04, 2025 - 07:30   ET

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

(COMMERCIAL BREAK)

[07:30:15]

JOHN BERMAN, CNN ANCHOR: All right. Happening right now you can see the stock markets -- the U.S. markets. Futures right now trading down and getting worse, frankly. The S&P now down .6 percent and this is after really big losses yesterday -- huge plunges. Investors reacting to the new tariffs issued by President Trump.

Now, overnight China, Mexico, Canada began to respond with harsher measures I think than people expected. And we are still standing by to hear from the Mexican president shortly.

Economists worry that tariffs might raise prices while Americans are still dealing with stubborn inflation.

With us now CNN's Vanessa Yurkevich and Paula Newton who is in Canada.

Let's start with Vanessa first on what we are seeing here and the implications.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yeah. So this really ignited a trade war between our three major trading partners. We're now seeing tariffs of 25 percent on imports coming in from Canada and Mexico, and now 20 percent total for imports coming in from China. This is going to impact $1.4 trillion worth of goods that come into the U.S. every single year. That's about 40 percent of all imports that we get every single year.

And what do we get from these major trading partners? Well, we get oil, food, electronics, and cars.

We are waiting to hear what Mexico is going to do in response, but we know what China is doing in response. They are retaliating with tariffs on their own hitting agricultural products here on the U.S. on things -- a 15 percent tariff on exports going to China from the U.S. Chicken, wheat, corn, cotton. Also, a 10 percent tariff on things like soybeans, pork, beef.

This is very critical because President Trump just yesterday posted on Truth Social saying that U.S. farmers are going to win out in this trade war, pointing to the fact that he was going to put reciprocal tariffs on other countries on April 2.

But since these tariffs have now gone into effect, we are seeing the impact from China hitting U.S. farmers. The American Farm Bureau Federation was basically pleading with Trump. You see the Trump -- the tweet there from Trump.

TEXT: "To the great farmers of the United States: Get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will go on external product on April 2nd. Have fun!"

But the American Farm Bureau Federation was basically pleading with the president not to put these tariffs into effect.

This is what the president of that federation said just a few days ago warning against this saying that, "Farmers and rural communities often bear the brunt of tariffs and tariff retaliation. Mexico, Canada and China are the three largest agricultural trading partners."

For the third straight year farmers are losing money on almost every major crop planted. So this is not going to sit well with the agriculture community.

This is just the beginning, John. We have to see how far this goes.

BERMAN: All right. And Paula Newton, you are standing by for us in Canada right now. Canadian officials have called this -- the tariffs -- an existential threat. What's the reaction this morning.

PAULA NEWTON, CNN CORRESPONDENT: Well, the reaction is they are hitting back. And I want to be clear here John that this will shake the Canadian economy to its core, but they do want to try and inflict some pain in the United States and clearly trying to target Republican states as well.

Now, firstly, there is going to be 25 percent tariffs on about $155 billion worth of goods. The first $30 billion of that already in place at this hour, John. And what is that going to hit? It will hit meat. It will hit vegetables, dairy products. Think of yogurt and milk. And key here is U.S. alcohol. Whether it's bourbon or whether it's beer, they are going to hit it with a 25 percent tariff as it enters Canada.

What's key here though is that they are ramping up for more in this country. We do expect to hear from Justin Trudeau at 10:30.

And these are the kind of threats that are on the table. I want you to listen now to Doug Ford, the head of Ontario, Canada's largest province -- listen.

(BEGIN VIDEO CLIP)

DOUG FORD, ONTARIAN PREMIER: We keep the lights on in the 1.5 million homes and manufacturing in New York, in Michigan, and in Minnesota. If he wants to destroy our economy and our families, I will shut down the electricity going down to the U.S., and I'm telling you we will do it.

(END VIDEO CLIP) NEWTON: So I think as you heard there Canada is up for this fight. And let's make no mistake, John, this is going to hurt the Canadian economy much more than it would ever hurt the American economy. But consumers should be braced in the United States as well.

We do have a statement from Justin Trudeau that he released last night saying, "Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures."

[07:35:07]

Now, John, I want to point out that look, there was a 10 percent tax on energy right now that was imposed by Donald Trump. Canada is thinking of putting its own tax as that energy goes into the United States, which would bring energy costs up significantly for Americans -- John.

BERMAN: This will have an impact and potentially very quickly.

Paula Newton, our thanks to you. Our thanks to Vanessa as well -- Kate.

KATE BOLDUAN, CNN ANCHOR: So tonight President Trump -- he's going to be laying out his vision and plans for the country in his second term.

On the economic front -- well, just what John was talking about. He's already making his vision a reality imposing a new round of tariffs on America's biggest trading partners triggering retaliation from those partners already overnight and triggering a mixed reaction from congressional Republicans.

(BEGIN VIDEO CLIP)

REP. MIKE LAWLER (R-NY): I have no problem with the use of tariffs as a negotiating tool, but if you're going to threaten the use of it then you actually have to do it, right? And that's -- that is certainly what the president is doing.

MANU RAJU, CNN ANCHOR AND CHIEF CONGRESSIONAL CORRESPONDENT: What's the impact on your constituents if these tariffs go through?

REP. DAN NEWHOUSE (R-VA): Well, it wouldn't be good. I come from an agricultural area. Canada and Mexico are two of our top trading partners. And so it would make our ability to sell our products more difficult.

SEN. ERIC SCHMITT (R-MO): Well, we'll see how these tariffs ultimately play out. I do think the general proposition of saying we're going to charge you what you charge us -- this reciprocity is a good thing because I think it's going to bring down costs ultimately.

(END VIDEO CLIP)

BOLDUAN: And that's just one part of what's going to hopefully -- what's going to be laid out in the speech tonight.

Joining us right now is Mica Soellner, congressional reporter with Punchbowl News.

You can be sure Mica that lawmakers are going to want to be hearing and maybe expecting to hear more about exactly what his economic outlook and agenda is considering the tariffs that have just set in overnight and considering the heartburn that it could cause many in many states across the country.

What are you hearing from lawmakers and what they're preparing for this evening?

MICA SOELLNER, CONGRESSIONAL REPORTER, PUNCHBOWL NEWS (via Webex by Cisco): Yeah, absolutely. Thanks, Kate.

I mean, I think that we're going to hear a much more subdued response from Democrats when it comes to what Trump is actually saying. They are going to strongly focus on an economic message -- his policies rather than his personality -- which is what they've done in the past, especially during his first term.

I think we're going to see a lot of pushback against his economic agenda, the tariffs, as well, especially, on DOGE and Elon Musk's impact on federal workers.

BOLDUAN: It's definitely the -- you know, the talking points that we have been hearing from Democrats is focusing on DOGE and the impacts, that's for sure, especially with kind of now the role that Elon Musk may even play tonight.

What about -- what are you hearing about Sen. Elissa Slotkin and the Democratic response? I mean, she is known to be pragmatic and more moderate. She also has an extensive background in national security. She's from a state -- a critical state on all of these fronts in Michigan that Donald Trump won in November.

What are Democrats hoping she can deliver?

SOELLNER: Yeah. I think Slotkin is a very interesting choice given the fact that she was able to outperform Trump and win her Senate race in Michigan, a state that Trump did take last cycle. So she's an interesting choice as the party really seeks to kind of move into a more center-left vision nationally.

But I will add that obviously, Sen. Bernie Sanders is also going to give a separate address, so there is some interparty tension there still between whether progressives think the center-left is the best approach or they need to actually stick to progressive policies that they actually think were not the problem last election.

BOLDUAN: Mixed reaction from Republicans on halting military aid to Ukraine that we've heard in terms of changes coming from the president. Mixed reactions from Republicans on Trump's tariffs. Mixed reaction from Republicans on DOGE and the impacts. And you also have new reporting of some mixed reaction or some Republican pushback now against Donald Trump's immigration plans.

SOELLNER: Yeah. I mean, I think that we're going to see more House Republicans and Senate Republicans come out against Trump's policy as soon as they get more comfortable, and especially in the House as the midterms near. And I think that's going to range on a whole lot of issues, like you said, and we're going to see a little bit more outspokenness, especially as people see the crunch and Democrats kind of seize on these issues that they are seeing that may be unpopular with the public.

BOLDUAN: Mica Soellner, thank you so much -- John.

BERMAN: All right. With us now, CNN political commentators Paul Begala and Scott Jennings. Gentlemen, we have a lot to discuss.

I actually want to start with the tariffs and the economy because we have been watching the stock market all morning long. Yesterday, the stock market was in despair over the tariffs. This morning it's just mild disdain, down half a percent or so.

[07:40:00]

The Wall Street Journal editorial board writes, "We've courted Mr. Trump's ire by calling the Mexico and Canada levies the 'dumbest; in history, and we may have understated the point. Mr. Trump is whacking friends, not adversaries."

Scott?

SCOTT JENNINGS, CNN SENIOR POLITICAL COMMENTATOR, FORMER SPECIAL ASSISTANT TO PRESIDENT GEORGE W. BUSH: Well, a couple of things. Number one, Trump has said there may be some pain in this, and he's admitted that. Number two, he ran on it and the American people voted for it, so there's really no surprise in the actions he's taking.

Number three, immigration and fentanyl is a real issue and getting these neighbors of ours to understand they have more responsibilities here is a goal of this.

And number four, there is some evidence that some of the tariffs moves are actually having a jobs impact on the United States. I think since Trump took office there's been, like, $1.7 trillion in announcements of new investments in the United States. Honda moving a plant to Indiana. There is the big chips maker from Taiwan that's opening plants in Arizona.

So it's not all bad news. But Trump himself has admitted there could be a little pain. You could see a few bumps in the road with it. But he thinks the goals of getting immigration and the fentanyl flow under control are worth it.

BERMAN: China indicating overnight that they may back off some of their measures to stop the flow of fentanyl, so there could be some backfiring here going on.

Paul, Scott mentions that President Trump admits that there might be some pain involved. How much pain do you think voters will be willing to endure before we start seeing it show up?

PAUL BEGALA, CNN POLITICAL COMMENTATOR, DEMOCRATIC STRATEGIST (via Webex by Cisco): Well, the pain is going to be felt by the people who voted for Trump more, and that's what's really a betrayal here. It's really outrageous. No pain is going to be felt by Elon Musk. No pain is going to be felt by Mark Zuckerberg. No pain is going to be felt by his billionaire's boys club. And this is the betrayal at the heart of Trump.

He got elected -- really, the immigration was a big part of it, but the number one issue was cost of living. He got elected to cut the cost of groceries, gas, and rent. Well, you can't have high tariffs and low prices. And it's going to fall terribly on middle class working people, a huge number of whom voted for Mr. Trump.

This is going to punish cotton farmers, corn farmers, chicken farmers. God help us, Scott. It's going to punish the bourbon industry in your beloved Kentucky.

It is just really an outrage and it's a betrayal. And I think that's the key to this is that good people -- a lot of good people voted for Donald Trump because he thought -- they thought he could lower the cost of living. Now he's raising their cost of living. And it's an economic disaster and it's a political disaster.

BERMAN: So Paul, what would be your economic tweet -- you know, 140 characters or less -- tonight if you were advising Democrats on how to respond to this?

BEGALA: One word: betrayal, betrayal. This is a betrayal of the American middle class. Our country is great not because of those weirdo incel billionaires that hang out with Mr. Trump. It's great because of the middle class, and that's the heart of this country and Donald Trump betrayed them. God bless them.

This is the most important thing about the last election, and it breaks my heart. Trump won voters who make less than 50 grand a year. He won them. That used to be the core of the Democratic Party. It's now the core of Trump space. He's betrayed them. And I think that's what Democrats need to say is that if you thought Trump was going to help you, he is stabbing you in the back, and that's a terrible, terrible betrayal. It allows the Democrats to get back to where they ought to be, which is on middle class economic issues.

BERMAN: All right, Paul -- sorry, Scott. I want to give you a quick chance to respond to that. And also you mentioned pain. How much pain do you think that voters will be willing to endure here?

JENNINGS: Well, I think Trump has more political leash than Democrats want to give him credit for. I mean, after all, Joe Biden spent four years wrecking the economy, driving up inflation, and that's what caused -- I mean, I agree with Paul. It was the economic conditions of the country along with immigration that caused Donald Trump's victory. So I don't think there's an expectation that he should have all of Joe Biden's problems solved within the five minutes he's been in office so far. But eventually, yes. By the midterms you do have to go to the people

and say here is what I did on the issues that drove me into office. Here's what I did on the economy. Here's what I did on immigration. Immigration at this point is largely solved. I mean, the border is effectively shut down just by virtue of Trump taking office.

But on the tariffs, it has to be coupled with this economic plan that Congress is going to roll out. They have to make the tax cuts permanent. They have to get energy policy to a place where you can drive down energy prices. That does lower the overall cost of doing business in the United States. So the tariffs are not the only story.

There is more to come, and that story will have to be told over a two- year period and ultimately the voters will have to decide if they like it.

BERMAN: There's a heck of a story going on in Ukraine right now where Russia has been attacking overnight since the president announced that he's stopping aid to Ukraine -- military aid to Ukraine.

This was the response in Politico from Congressman Don Bacon, a Republican from Nebraska. Don Bacon told Politico, "Too bad Iran, North Korea and China are not pausing their military aid and economy support, Don Bacon told Eli." That's Eli Okun who wrotes for -- writes for Politico. "There is an invader and a victim, there is a democracy and a dictatorship, there is a country who wants to be part of the West and one who hates the West. We should be unambiguously for the good side."

Scott, who is the good side here?

[07:45:00]

JENNINGS: The good side is Ukraine, and multiple things could be true. Number one, you can believe and know that Russia is the aggressor and that Vladimir Putin is a bad guy. Number two, you can also believe and know realistically that political will in this country to continue to fund an open-ended conflict is draining rapidly. And number three, you can also believe all those things and also that Zelenskyy made a mistake on Friday.

And I'll throw in number four -- that Donald Trump is a new player on the field. He's a new broker here. He campaigned on ending this war. He knows that it's highly unlikely the Congress is ever going to appropriate another dollar for Ukraine. That's why peace now is vital.

He tried to get Zelenskyy to buy the Ukrainians closer to the United States than ever with a mineral deal. Zelenskyy couldn't bring himself to just say thank you and do it on Friday. Now we're in bad shape on it.

But I do think Trump means it when he says, "I want peace now." The political reality is there's never going to be a moment where Vladimir Putin says, "Hey, I'm taking the knee. I lost. I am going away with my tail between my legs." You've got to come up with a solution that gives both guys a chance to save face and I think that's what Trump's trying to do.

BERMAN: Paul, who on all of planet Earth -- I'll make it an open- ended question -- is happiest about the decision from President Trump to halt military aid to Ukraine overnight?

BEGALA: Well, of course, it's Mr. Putin. Vladimir Putin is the -- is the happiest guy. His spokesman, Dmitry Peskov, said that. He said America is completely aligned with our priorities and our policies.

Look, Scott is a friend and he's a great guy. He's wrong when he says this is about peace. This is surrender. Surrender does not bring peace. The greatest lesson of history -- my Republican friends used to know this -- is that weakness invites aggression.

This is a surrender that will bring about more wars. Putin will re- arm, he'll recover, and then he'll reinvade Moldova, Latvia, Lithuania, Estonia.

Xi Jinping is watching this. He's going to invade Taiwan. Iran is watching this. They are already arming Russia and attacking Israel.

So this is the problem here. Mr. Trump is guaranteeing us more wars because we all know there's nobody who has run a country, OK, in this -- in this show. But if you -- if you raise a kid, if you train a dog, if you coach a basketball team you know that weakness invites aggression. And Mr. Trump is surrendering, which is only going to cause more wars.

BERMAN: You knew you were in trouble when he said you were a friend, and he likes you.

Scott Jennings, Paul Begala, thank you both for being here this morning. Both of you friends of the show.

BEGALA: Thanks, John.

BERMAN: And, of course, everyone can follow CNN for complete coverage of the presidential address to Congress. That is at 8:00 tonight right here on CNN.

This morning 30 correctional officers at a juvenile detention center are facing charges of abuse for facilitating so-called "gladiator fights" between the children in their care.

And then overnight, Dolly Parton's husband of 60 years, Carl Dean, passed away. How the American icon is remembering the man she met on her very first day in Nashville.

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[07:52:50]

BOLDUAN: Elon Musk and his DOGE team might be getting a helping hand -- helping hand from AI right now to push the purge even faster of the federal workforce. CNN has new reporting that the team is using artificial intelligence to help make these cost-cutting decisions, but that is also now raising fresh security concerns.

CNN's Clare Duffy has this reporting and she's here with us now. Tell us more about what you've learned.

CLARE DUFFY, CNN BUSINESS WRITER: Yeah, Kate. So there have been a number of these reports that DOGE is either using or considering using AI as part of its way of speeding up these cuts to federal programs and federal staff.

And so I wanted to talk with AI experts and technology experts about the potential risks here because, of course, we know that AI can have efficiency benefits.

BOLDUAN: Right.

DUFFY: That, you know, it can -- it can process lots of data very quickly. But AI experts also say that there are serious risks here. For example, we know that AI can be biased and that could affect who is getting hired and fired.

There was one report from WIRED that said that the DOGE team was looking at using AI to evaluate those responses to the requests for five bullet points, asking what federal employees had done last week. One expert telling me that if there is a very talented federal worker for whom English is not their first language that email could be ranked lower than other workers who do speak English fluently. Those kinds of issues we could be seeing here.

Experts also said that depending on how it's used, AI could introduce serious security risks to sensitive government data, personnel information.

And really, the big question here is how much human oversight is there? How much human -- how many humans are looking at the responses and paying attention to what kinds of data is getting fed into these systems?

I spoke with Amanda Renteria. She is the CEO of Code for America, which is a nonprofit that works with government agencies to implement new technologies. And she said you can't just train an AI tool in a system that you don't know very well because government systems are older. Oftentimes you can't just deploy a new technology on it and expect to get the right results.

Now I should say that we asked DOGE about this -- what systems they're using and how they're using them, and they did not respond.

BOLDUAN: I was going to say if you had gotten a response, you have buried the lead because no one is getting a response to any inquiries into DOGE.

[07:55:00]

But what they raise there is really interesting -- how AI is great but you've got -- you've got to know the system you're implementing this in before you can do it. And we know that the DOGE team does not. We know that Elon Musk does not.

DUFFY: That's exactly right.

BOLDUAN: And that's what he says -- that we make mistakes and we'll correct them with clearly, varying degrees of success in that.

Thanks, Clare. Great reporting -- John.

BERMAN: All right. This morning 30 officers at a juvenile detention facility in Los Angeles County have been charged with allegedly helping facilitate so-called "gladiator fights" among the children held there. According to the indictment, Padrinos Juvenile Hall allowed -- even encouraged nearly 70 fights between July and December of 2023. More than 140 victims between the ages of 12 and 18 were involved.

CNN has not confirmed that all of the probation officers in the video were indicted. The officers face charges including child endangerment, abuse, conspiracy, and battery.

So this morning Dolly Parton is grieving the loss of her husband of nearly 60 years. Carl Dean passed away yesterday in Nashville at the age of 82. In a statement Parton said in part, "Words cannot do justice to the love we shared for more than 60 years."

So the two met the day that Parton moved to Nashville at the age of 18. They married two years later in 1966. They were pretty private about their relationship over the years -- over the decades, but Dolly Parton revealed what she thinks made it work.

(BEGIN VIDEO CLIP)

DOLLY PARTON, SINGER-SONGWRITER: He's quiet and I'm loud. And we just -- we're funny. Oh, he's hilarious. And I think one of the things that's made it last so long through the years -- we love each other and we respect each other, but we have a lot of fun.

BUNNIE XO, HOST, DUMB BLONDE PODCAST: Yeah.

PARTON: Any time things get too much tension going on --

XO: Yeah.

PARTON: -- we -- either one of us can, like, find a joke about it --

XO: Yeah, you have to.

PARTON: -- to break the tension and where it's not -- we don't let it go, you know, so far. We never fought back and forth.

(END VIDEO CLIP)

BERMAN: They had a lot of fun. Sixty years' worth of fun. Carl Dean passing away at the age of 82, and may his memory be a blessing -- Kate.

BOLDUAN: A beautiful marriage. I love Dolly Parton -- every take she's got on it.

So the ripple effects of President Trump and Elon Musk's massive cuts to USAID are already being felt by communities in the United States.

CNN's Kyung Lah went to North Carolina to see it firsthand.

(BEGIN VIDEOTAPE)

RUTH GARFINKEL, FORMER MANAGER WITH USAID CONTRACTOR: My job brings in about 75 percent of our household income. With two small children, one still in daycare, we have a lot of childcare expenses, so not a lot of savings.

KYUNG LAH, CNN NATIONAL CORRESPONDENT (voiceover): Ruth Garfinkel, in Durham, North Carolina, is not a federal employee. That didn't stop what happened.

LAH: Life changed in January for you.

GARFINKEL: Yes. I worked for a USAID contractor and without USAID funding contracts then there's no job for me.

LAH (voiceover): She's taken out a home equity line of credit on her North Carolina house to now stay afloat.

Her family, part of an economic ripple effect of federal cuts felt acutely in the so-called research triangle of North Carolina where a CNN review shows in the last fiscal year USAID agreed to pay more than $1 billion to groups based in the state.

MAYOR LEONARDO WILLIAMS, (D) DURHAM, NORTH CAROLINA: Real things are happening. People are losing their jobs now.

LAH (voiceover): Walk with Durham's mayor through the city's downtown and you quickly learn there are a lot of Ruth Garfinkels here -- people who don't work for the federal government but for the organizations that receive USAID funding.

LAH: FHI down the street furloughed how many?

WILLIAMS: I believe they furloughed about 200 employees so far.

LAH (voiceover): CNN found more than 300 people laid off or furloughed in the state from USAID-related cuts, but that may be just the tip of the iceberg. The mayor expects local numbers to climb as subcontractors and other businesses report layoffs.

LAH: That's loss of income directly to the city.

WILLIAMS: The city, the county, the state, but most importantly, the families.

LAH: People think USAID is cutting funding to other countries.

WILLIAMS: It's happening right here in my city. When those jobs are gone that means I have one less resident that can support the small businesses like here locally. That's one less resident that can contribute to the tax base right here in Durham.

LAH: Making it harder and scarier for some in North Carolina are the trolls celebrating these job losses. One company that announced cuts in North Carolina shared with us emails like this. Hate letters sent by mail.

TEXT: I could not be more excited. F*** YOU."

U.S. AID is getting what it deserves.

LAH: And if you dare look on social media plenty of cheering for the suffering in the state.

TEXT: Great news!

Another USAID mite bites the dust.

BRIANNA CLARKE-SCHWEIM, NORTH CAROLINA GLOBAL HEALTH ALLIANCE: These are real businesses here in North Carolina. They support other businesses.

LAH (voiceover): Brianna Clarke-Schweim leads a North Carolina public health alliance.

CLARKE-SCHWEIM: A lot of people are applying for unemployment right now. A lot of people are also pulling their kids out of childcare. They're also thinking about their mortgages. They're thinking about what -- if they're going to stay in North Carolina. If they can afford to stay living here.

SADIE HEALY, USAIDSTOPWORK.COM: Thirteen thousand, one hundred twenty-four jobs have been lost or furloughed.