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Trump to Address Congress Amid Trade War, inflation fears; Trump Hits Canada, Mexico, China With Steep Tariffs; Trump Pauses Military Aid to Ukraine After Clash With Zelensky. Aired 2-2:30p ET

Aired March 04, 2025 - 14:00   ET

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

[14:00:00]

BORIS SANCHEZ, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": Not backing down from a fight. Canada and Mexico firing back at President Trump over his new tariffs. The consequences of this trade war could force Americans to pay more for everyday items, things they need. The President will talk about that in a primetime address tonight.

BRIANNA KEILAR, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": Ready to negotiate. Ukraine's President says, last week's meeting was regrettable, but he's willing to come to the bargaining table for talks as the White House presses pause on shipments of military aid to Kyiv. And taking on American gun makers, at the Supreme Court, Mexico arguing it deserves the right to sue those companies, accusing them of designing guns for drug cartels regardless of the consequences. We're following these major developing stories and many more, all coming in right here to "CNN News Central."

SANCHEZ: Just hours from now, President Trump will take the podium before Congress to lay out his new administration's vision for the United States over the next four years. It's a big night for the president, but it comes as his new tariffs have ignited a trade war with Canada, Mexico, and China. Right now, markets are plummeting in response, while the United States top trading partners are vowing to retaliate and Americans are bracing for higher prices on everyday items from groceries to electronics and cars.

Meantime, Trump will also use his address to make the case for his foreign policy plan, just as the White House hits the pause button on military aid for Ukraine following Trump's Oval Office argument with Ukrainian President Volodymyr Zelensky. The move is reverberating across the globe and now throwing U.S.-Ukrainian relations into doubt.

CNN's Chief National Affairs Correspondent Jeff Zeleny is live force at the White House. Jeff, obviously a lot at stake here. What should we expect from President Trump tonight?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Boris, there certainly is and this is the president's first primetime address since he has been back in power. And really, we are told that he is going to use tonight's address to explain what his -- the first of 43 days of his administration have been like. Largely, focusing on -- trying to focus on some of the Department of Governmental Efficiency things. Of course, Elon Musk's big approach to shrink the federal government. I'm told that Elon Musk will be on hand in the House chamber. So that, of course, will be one thing that Republicans may enjoy and like.

But, the challenges really are mounting even in the last 12 hours or so that makes this speech even perhaps more complicated than even yesterday, largely because of this trade war. There is no doubt that high prices have been one of the challenges of this administration. Presidents don't set prices, but they take the blame for the cost of prices. And this is something that certainly is now going to be fresh in the minds of so many voters, the new prices of automobiles, of vegetables, and so many other things. So the President, of course, I'm told, will defend his tariffs saying it's necessary. He has described in the past, short-term pain is necessary for immigration and stronger border policies.

But the question is what some of those Republican Senators from some farm states and others will do to respond. There is deep skepticism and opposition among many Republican members of the House and Senate about these tariffs. They believe that the prices will rise on consumers and the farm goods and other things will be hit with reciprocal tariffs from China. So certainly, the challenges for the president have intensified with these policies he has put in place.

SANCHEZ: And Jeff, we are hearing that some Democrats are planning to boycott tonight's speech. I spoke with Senator Ron Wyden of Oregon yesterday, who says that he's going to actually hold a town hall with constituents. Some are declining to go altogether. What are you hearing about their plans?

ZELENY: Look, we always hear from some members of the opposition party who decline to go to the speech, but I think the vast majority of the seats in the House chamber will be filled. I think a better question is what Democrats will do in response. I think we all remember the last time that the president was in this setting five years ago, an entirely different circumstance. Speaker Nancy Pelosi, of course, famously ripped his speech.

There will be no Democrats sitting behind him. Republicans are in complete control of the government. However, the Democratic response will be led by freshman Senator Elissa Slotkin of Michigan. And Michigan is ground zero for the -- really the aftermath and the effect of this trade war with Canada and Mexico, the automobile industry front and center in this. So look for her response to talk about that and how average American consumers have been impacted by all this.

But I would not be at all surprised to see if there are some outbursts in the chamber, but I do think that the vast majority of Democrats will go.

[14:05:00]

But certainly, a long speech, I'm told tonight, that begins at nine o'clock Eastern Time. Boris?

SANCHEZ: And you can catch it right here on CNN. Jeff Zeleny, live at the White House with the key clutch plug. Thanks so much, Jeff. Brianna? KEILAR: Americans stand to pay a hefty price for President Trump's newly imposed tariffs on Canada, Mexico, and China. CNN's Vanessa Yurkevich is with us more -- with us now with more on this. Tell us, about the cost here, Vanessa.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yeah, and if you just look at markets on your screen right there, you can see the Nasdaq recovering a little bit. But for most of the past 24 hours, markets have been in the red as investors are trying to digest what these tariffs are going to mean for prices, how consumers are going to react, and then what that means for the business outlook, and what businesses are going to be doing in the future.

This is important though, of course, for consumers as well on Main Street. What does it mean for all of us? Well, because of these 25 percent tariffs on Canada and Mexico, and a 20 percent tariff on China, we are likely going to be paying higher prices for key things like oil, food, electronics, things like cars, right there on your screen, these are things that are going to be seeing higher prices because of these tariffs.

And we as Americans consume about $1.4 trillion worth of goods that are now going to be taxed by these tariffs. That's 40 percent of all imports that we get every single year. And of course, now we have retaliatory tariffs. We know that China is retaliating specifically on agriculture products. If you look on your screen, you can see just the images that we'll show you. Look at them, that's all farm products that's going to be hitting us farmers at their bottom line. Also Canada, similarly retaliating against things like meat, vegetables, dairy, and alcohol. And when you put this all together, this is about $1,200 more per year that American families are going to have to be spending because of these tariffs.

And the signal is from President Trump and the White House is that this is only the beginning. This is the beginning of the trade war. This could certainly escalate. That is not what American families want to see right now and that is not exactly what the president promised in terms of prices. So, we are waiting to see what the president says tonight, how he validates all of this. But Brianna, a trade war is certainly brewing at this moment.

KEILAR: Sure is. Vanessa Yurkevich , thank you so much.

SANCHEZ: Joining us now to discuss all these developments is Justin Wolfers, a Professor of Economics and Public Policy at the University of Michigan; Andrea Kendall-Taylor also joins us. She's a Former U.S. National Intelligence Officer for Russia; and Mark Preston, CNN Senior Political Analyst. Thank you all for being with us.

Justin, how do you think this trade war is going to impact specific goods that Americans buy from Canada and also the stuff that Canadians are buying from Americans?

JUSTIN WOLFERS, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, UNIVERSITY OF MICHIGAN: Yeah, so there's some specifics that you'll see, things like fruit and vegetables, we import a lot of our fruit and vegetables from Canada and Mexico. So, that next trip to the supermarket's going to be a whole lot more uncomfortable now those tariffs are in. But I think rather than listing specific goods, it's worth noting that when there's less competition from abroad, it's also the case that American companies, when they face less competition, are going to hike their prices. So there'll be higher prices all around.

And I think more generally, it's worth putting this in a broader context, which is this is the largest tax hike in the United States since 1993. And you can -- you bet your life you're going to see some economic consequences out of that.

KEILAR: Yeah, that's no fun. Add that to, what is this, don't check your 401(k) week, I think, month?

SANCHEZ: Yeah.

KEILAR: Let's hope it's just month. It's going to maybe be a while here. Mark Preston, second day in a row. Stock markets have dropped sharply because of the tariff war. And I know Trump acts like he's not looking at that, but we know that he does. He really likes when it's booming to claim credit for it. How does he reconcile that? Because that does put pressure on him.

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Well, he doesn't reconcile it in the real world. He'll reconcile it in his world. And if you look at any issue necessarily that he likes to champion and you know, when things are going well, he loves to take credit for it. I mean, we could talk about polling, public polling for instance. He always goes out there and tells polls that say that he's, you know, beloved by America. But he hates polls that say that America is not very happy with how he is behaving.

But basically, the fact of the matter is he can't reconcile it. The question is what is the amount of time that he has to get his agenda through Congress before some of these House members and some of these United States Senators start pushing back against Donald Trump? Look, I think he gets through the year and then, you know, all bets are off at that point because then we head into the midterms.

[14:10:00]

SANCHEZ: Andrea, we are also expecting Trump to bring up Ukraine and the situation there during his speech tonight. I wonder how you think his feud with Volodymyr Zelensky has impacted peace talks with Russia. Do you think Putin feels emboldened to make a deal when the White House hasn't explicitly said what concessions they'd like to see from the Kremlin?

ANDREA KENDALL-TAYLOR, FORMER DEPUTY NATIONAL INTELLIGENCE OFFICER FOR RUSSIA: Well, I think you're right that the Kremlin is emboldened because everything seems to be going in the Kremlin's direction. Certainly, the big blow up in the Oval Office on Friday with President Zelensky has given the Russians great glee that we could see a rupture in U.S.-Ukraine relations, and then the announcement about curtailing U.S. security assistance for Ukraine. You had the Kremlin spokesperson, Dmitry Peskov saying that this will push Ukraine to the negotiating table.

But when the Russians say that, they basically are talking about the capitulation of Ukraine. So right now, Russia really is in a wonderful position, and you can see it from public statements in the way that it's being covered in Russian media, that everyone is quite jubilant about what President Trump seems to be willing to do to the Ukrainians and his obvious desire to normalize relations with Russia.

KEILAR: And you know, we're talking about these different things that are going to be in the speech tonight, Andrea, but they do kind of tie together because one of the reasons that he makes this argument for restricting aid to Ukraine is let's spend the money at home. And that's something, as you know, that's very popular with his supporters. But at the same time, can you speak a little bit to what you think the impacts will be of restricting that military aid, how quickly we can see that, and actually how, as expected by so many observers of this war from here in the U.S., this actually could really hurt American interests?

KENDALL-TAYLOR: Oh, it absolutely hurts American interests. I mean, in terms of curtailing the aid, we might not see an immediate impact on the battlefield in Ukraine in large part because Ukraine has become less dependent on the United States for that aid, but it will have serious impact over time. And the real risk is that Ukraine will have to ration artillery, that there'll be a dearth of air defenses to protect their cities and their infrastructure. It'll make it harder for Ukraine to address the manpower issues that the Trump Administration keeps pushing on because who will want to sign up without U.S. backing?

And I guess, if you extrapolate that forward, if we do really see a United States that pulls the rug out from under Ukraine and a Putin who believes that he has been able to accomplish his objectives, then I think we have a real problem, not to mention the fact that the United States is also talking about lifting sanctions on Russia and pulling U.S. forces back away from the Eastern flank. And so, what I worry about is what the Trump Administration is doing is creating conditions for Russia to increase its aggression. And if that does destabilize Europe, that will all come back and hurt the United States in large part because our economies are so interlinked.

So, what happens there does matter and that was the point that President Zelensky was trying to make to Trump in the White House, which is we might have this ocean, but the United States will ultimately feel the effects if we walk away from Ukraine and we downsize our commitment to Europe.

SANCHEZ: Mark, I think on both the situation in Ukraine, the way that the U.S. approaches its allies in Europe, and this trade war that Trump has sparked, there's a clear dissatisfaction among a lot of folks that support the president with the status quo. The way that the United States has established the world order since World War II.

PRESTON: Right.

SANCHEZ: In fact, we just got the statement from the United Auto Workers Union, and it's praising President Trump installing these tariffs on China, Mexico, and Canada, and it specifically states Trump taking aggressive action on ending the free trade disaster that has dropped like a bomb on the working class. You would think that folks benefit from free trade in the United States and the way that the U.S. has flourished and developed these alliances with other countries. But a lot of folks don't see the benefit.

PRESTON: Well, a lot of folks in industries necessarily that don't do well in Europe and elsewhere overseas, right, and the auto industry is somebody, you know, the United States auto industry is something that has struggled behind the Japanese and elsewhere who produce cars. So that's why you're going to see a pushback by the likes of the unions. And we've seen Donald Trump court the unions over time. He has a very smart way of delivering a populist message that can actually attract people.

[14:15:00]

But at the end of the day, just as like Vanessa was saying earlier, your gas prices are going to go up, your grocery prices are going to go up. And at some point, when do people push back? Again, I think he's got some runway. But at some point, he will have to step back and listen to the American people.

KEILAR: And Justin, intertwined in all of this, you know, with Europe and tariffs is he's been talking about expanding this trade war to Europe. He hates that VAT, that value added tax, right? And if he really does go with what he's talking about, that would be a giant tariff on Europe at a time where he's also putting them on the hook for the war in Ukraine. What's the effect of that?

WOLFERS: Look, what we're seeing all around the world, you can actually tie all of these threats together from Ukraine to tariffs to DOGE, what we're seeing in the United States and in Europe is economic policy uncertainty has just absolutely skyrocketed. We have measures of it that suggest that during my lifetime, it's been high. The highest levels it's ever gotten were during the COVID pandemic when there really was something going on and right now. So, this is a chaotic white House that's sowing economic chaos. And what you're also seeing then is very sharp declines in consumer and business confidence.

And, so if I were a CEO right now trying to think about a big investment, I'd be sitting on my hands for a couple of months waiting to see how everything shakes out. And if that turns out to be what people do, that in itself would cause economic harm.

KEILAR: Justin Wolfers, Andrea Kendall-Taylor, Mark Preston, thank you so much to all of you for the conversation. A lot of important topics that we'll be looking at tonight. Still to come, no wi-fi, no electricity, missing desks, what some federal workers are running into after returning to the office.

SANCHEZ: And later, an unusually powerful March storm threatens to create blizzards, tornadoes and fires as it crosses the United States. That and much more coming up on "CNN News Central." Don't go anywhere. (COMMERCIAL BREAK)

[14:21:45]

KEILAR: Some federal workers ordered back into the office full-time by the Trump Administration were met with quite the surprise. In some agencies, employees tell CNN there was no working wi-fi, no electricity, if you can imagine, and in some cases, no desks to do their jobs. CNN Washington Correspondent, Sunlen Serfaty is here with more. Wow, Sunlen, how do people work under those conditions?

SUNLEN SERFATY, CNN WASHINGTON CORRESPONDENT: Yeah, they're not doing much work, Brianna, at least for the first week that they were back, for many federal workers in Washington and the remote offices across the country, the first week back was very bumpy. It was quite literally a mess, is what one federal worker told me and a few other of my colleagues who were looking into this. They described the working conditions of lack of wi-fi repeatedly and over many days, lack of electricity, at least for a few hours on that return to office date last Monday. Wires sticking out of walls, wires laying on the floor, so much so that at least one worker tripped and had a gash on her foot and actually had to file a worker's comp complaint on her first day back in the office.

So essentially here, we're talking about the real basics of workers having to do their work in their office, and they don't have that. It was insufficient at best. And many of the workers that I talked to said that it's hard to read this any other way than they feel like the Trump Administration is in essence trying to make them uncomfortable in their jobs, trying to force them to quit. I spoke with Ceretta Smith (ph), she's president of the American Federation of Government Employees, the local 252 unit in Dallas and the Department of Education. And she described these conditions at her local Department of Education office and she says no one is on site to try to fix the issues. I guess that they don't and didn't expect us to come.

I do want to add in all of this, even though we're talking about how the first week was super bumpy for these employees, a lot of the federal employees I talked to did say, look, I'm very thankful to have a job, obviously, given the climate right now with all the layoffs and the cutting. We just want to be able to do our job. And certainly the reports that we received is an effort to make things more efficient, bring these employees back, at least for the first week, is making a whole lot less efficient.

KEILAR: And what is the Trump Administration saying about this?

SERFATY: Well, it's very clear this is happening over a massive part of government, many agencies. So we did go to many of the agencies that we spoke with in this article and they got back to us. Some did, some did not, but very clear that they're trying in essence, to just carry out this mandate. HHS Communications Director said, we look forward to seeing and collaborating with our colleagues in person to make America healthy again, saying that they are going to comply with Trump's returns to the office executive order. Another agency is the Department of Education, they sent out an email to their employees which we were able to see, and it admitted the shortcomings in being able to provide for many of these remote offices. So very clear, a lot more work has to be done to allow workers to do their jobs.

KEILAR: Certainly, Sunlen, thank you so much. Boris?

SANCHEZ: CNN has learned that during the Trump Administration's purge of foreign Assistance funding, it also eliminated specific programs that were supposed to be spared by the State Department because the administration said they were lifesaving programs that provided clean water and shelter and treated babies and kids with infectious diseases and HIV and AIDS. CNN State Department reporter Jennifer Hansler joins us now live with more.

[14:25:00]

Jennifer, which programs specifically were impacted and how did this happen?

JENNIFER HANSLER, CNN STATE DEPARTMENT REPORTER: Well, Boris, last week, the Trump Administration began rolling out termination notices for nearly 10,000 foreign assistance awards at the State Department and USAID. The Trump administration had said in a filing to the court earlier in the day that they had finished this review of their foreign assistance freeze and these were the programs they deemed should be terminated. However, much like that freeze, the scope of these terminations was incredibly broad and it included programs that they themselves had said were lifesaving and should be granted waivers to continue that lifesaving work.

To give just one example, the Elizabeth Glaser Pediatric AIDS Foundation, which works to combat HIV AIDS in children and families around the world, said that three of their programs that had been granted waivers were terminated last week. They said that these were programs in Lesotho, Expertini and Tanzania, that these were projects that were supporting more than 350,000 people on HIV treatment, including nearly 10,000 children and more than 10,000 HIV positive pregnant women.

And that's just one example out of dozens and dozens that I've heard about, Boris, including temporary shelter and clean water, efforts to stop children from being radicalized. These were all put to a halt last week when these terminations were rolled out. Now, this comes on top of the already impact that we had seen from that more than month- long foreign aid freeze that humanitarian groups and workers at USAID and the State Department said were having devastating consequences as well as the reduction of the workforce at USAID. They say all of these had had massive implications, not just for people around the world, but also here in the United States, Boris.

SANCHEZ: And Jennifer, are these programs going to now be reinstated?

HANSLER: It's a great question. We have heard some examples here and there of some programs that had been terminated and now have been told by the government that those contracts have been restored. However, those stories are few and far between and there's greater questions about whether it is too late to mitigate some of the damage that has been done. Many of these groups say they have not been paid in more than a month for a lot of the work they had done even before that late January foreign aid freeze. So they have had to furlough and terminate employees and there's been a lot of damage that may be irreversible here. Boris?

SANCHEZ: Jennifer Hansler, live force at the State Department. Thank you so much.

Coming up, Democratic lawmakers are hoping to send a message to President Trump by bringing fired federal workers along with them to tonight's join address to Congress. We're joined by Senator Richard Blumenthal and his guest in just moments. Stay with us.

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