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Futures Up Ahead of Critical Inflation Report & After New Trump Tariffs; Trump's Sweeping 25% Tariff on Steel, Aluminum Imports Takes Effect; VA Secretary Defends Proposed Reduction, Says 80K Cuts is a "Goal"; Search Intensifies for Missing Student in Dominican Republic. Aired 7:30-8a ET

Aired March 12, 2025 - 07:30   ET

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

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[07:30:36]

SARA SIDNER, CNN ANCHOR: All right, right now we're watching markets after President Trump's trade war enters a new phase. Futures right now pointing slightly higher after Trump sweeping 25% tariffs on all steel and aluminum imported into the United States went into effect overnight. It's a move that could drive up the prices of cars and appliances, cans, medical equipment and more.

We're also waiting for a key report on inflation out this morning that will give us a brand-new gauge on where our economy is going.

CNN's Matt Egan is joining me now. What does the latest round of tariffs really mean to Americans? Because it's -- you don't feel it immediately, but Wall Street generally gives you some sense. You do get hit there first.

MATT EGAN, CNN BUSINESS REPORTER: That's -- that's true. I mean, look, Sara, another day, another tariff hike from the President. The goal here is to try to level the playing field in global trade.

The problem, though, is that some experts are warning it could backfire because steel and aluminum are critical inputs, right? They are used to make everything from medical devices and cans, appliances, infrastructure, power lines and the big one cars. Remember, cars, they have hundreds of they have a lot of steel and aluminum in them, right?

And car prices. They're already basically at record high. So it's hard to see how making a key input more expensive with this 25% tariff is going to help things here. Some experts are warning that, yes, this could backfire on not just consumers, but also on workers.

I talked to Kent Smetters. He's a professor at Wharton where the president went to school and he said this is not going to help manufacturing. It will hurt manufacturing. Even Alcoa, one of the biggest aluminum makers in the United States, has warned that these tariffs could kill 100,000 American jobs. There's also the risk that it ignites a global trade war. The U.S. imports a lot of steel and aluminum each year, a lot of it from Canada, but also Mexico, China, the UAE, Brazil, South Korea. Now these countries have to decide how are they going to respond? The European Union, not wasting any time here, they immediately announced retaliatory tariffs on items that are made in America, including we've seen bourbon, peanut butter, jeans, boats, motorbikes, all of them, $28 billion of U.S. goods face retaliatory tariffs.

Now the E.U. tariffs, they don't kick in until next month, so that leaves some time for some negotiation, of course. But if they do kick in, this could hurt U.S. workers in these sectors because the stuff that they make just got more expensive.

SIDNER: You know, Trump has been saying, look, there is pain and there is going to be disruption that's going to happen, but eventually this is going to be good. The question is how long Americans will be able to shoulder this pain. We will have to wait and see, and we are waiting for the markets. Right now, things looking slightly up, but nothing like what happened with the downturn yesterday.

EGAN: Yeah, slightly up after some days of really steep losses.

SIDNER: Yeah. All right. Thank you so much. We'll wait for the bell to ring.

Kate?

KATE BOLDUAN, CNN ANCHOR: And as the President's sweeping tariffs on foreign steel and aluminum will likely be adding even more pressure on what's been a week of U.S. stocks plunging, the Wall Street Journal's editorial board continues to call out President Trump in a way really that only the Wall Street Journal can, writing this in part: "The trouble with trade wars is that once they begin, they can quickly escalate and get out of control, all the more so when politicians are nearing an election campaign, as Canada now is, or when Mr. Trump behaves as if his manhood is implicated because a foreign nation won't take his nasty border taxes lying down. We said from the beginning that this North American trade war is the dumbest in history, and we were being kind."

That's from the "Wall Street Journal."

Joining us right now is Democratic Senator Richard Blumenthal of Connecticut.

There's that side of it, Senator. But then you have the iron and -- the iron and steel industry, aluminum steel industry in the United States, and they like what they're seeing here. A trade group calls these tariffs very effective. The head of American Iron and Steel Institute saying that things would be without those tariffs much worse for the industry. So what say you about where things stand today with this trade war?

SEN. RICHARD BLUMENTHAL (D-CT): This trade war threatens not only a global trade conflict, but also an immediate recession for the United States. Higher prices for consumers, not just on cars, but on gasoline and energy. For example, the imports of Canadian electricity, which are about 11% of the Northeast supply, and prices of groceries, food, milk, eggs will likely rise.

[07:35:24]

And the imminence of a recession may be less painful for the billionaires and for the Secretary of Commerce, who says it's no big thing, but it will affect average every day Americans. So the pain is going to be felt nationwide, and it's avoidable. The last time we tried one of these major trade wars, I think under President McKinley, it proved to be a disaster, and he concluded it was a mistake.

BOLDUAN: Well, the President was asked about the immediate impacts that we've seen, which is this massive sell-off we've seen in U.S. stocks, and the continued fears about a recession, given how he's answered the questions around it. And I want to play for you what President Trump said yesterday.

(BEGIN VIDEO CLIP)

REPORTER: Do you and your tariff policies right now bear any responsibility for the turmoil we're seeing?

DONALD TRUMP (R), U.S. PRESIDENT: Biden gave us a horrible economy, he gave us horrible inflation, and I think the market was going to go very, very bad.

(END VIDEO CLIP)

BOLDUAN: When does this become the Trump economy? He is just six weeks in. Can he argue this still is not his to own?

BLUMENTHAL: The economy under Joe Biden was chugging along pretty well. And what Donald Trump is doing now is potentially going to disrupt disastrously a success story for America. And that's why business executives are expressing alarm. The "Wall Street Journal" is calling it the dumbest thing they've seen, and why he's doing it is really a mystery. He should be building on this economy, not trying to undermine and destroy it with these self-destructive tariffs, which are not only undermining American economic power, but also militarily, and of course are standing in the world, because nobody can figure out where we're going from here. And the back-and-forth tariffs, one day withdrawn or delayed the next, creates an uncertainty which itself undermines the economy.

BOLDUAN: Let me ask you about the funding fight now. Now it's sitting before you all in the Senate. Whether or not to pass this stopgap that the House just approved is the big question to avoid a government shutdown. You said yesterday, Senator, that you were going to wait to see what the House sends over before you decide how to vote. They have sent it over. How are you going to vote?

BLUMENTHAL: What this House has sent over is a horrible, continuing resolution. It's a stopgap for six months, which means we have no budget for this year, just a continuation of the spending that exists right now. But it's not a clean CR, because it reduces the amount of that spending by $13 billion for non-military purposes.

I support the additional military spending, but it cedes unwarranted, broad, unbridled discretion to the President, a kind of slush fund. The alternative could be to shut down the government. So it's a very difficult choice. I'm going to be talking to my colleagues about where we go from here, and we're going to try to do what's best for the country.

BOLDUAN: At this point, it's a binary choice. At this point, it's a binary choice, it seems. So where are you this morning? Where are you leaning?

BLUMENTHAL: I'm leaning against, but frankly, that's just a judgment at this hour. We're going to be meeting later today to decide what is best for the country. And you're right. The House of Representatives has gone home, leaving us with virtually no possibility to amend this bill. I think what we should try to do is a short-term, 30-day extension of the current spending, so we can negotiate a real budget, not kick the can down the road for a full six months, determine priorities, and maintain control in the Congress over the power of the purse, which constitutionally is ours. We shouldn't be giving it away to the President.

BOLDUAN: What you want and what you've got are two very different things, it seems, right now in terms of your choices on this.

Before I let you go, I do want to ask you, though, about, you are the top Democrat on the Veterans Affairs Committee. And at the V.A., the Secretary basically just confirmed that their target is to cut tens of thousands of jobs. The target is to cut 80,000 jobs from that department. And in response to that, you've announced that you're a new bill. And as part of the bill, it would require reinstating all fired veterans and more with full back pay and benefits.

[07:40:01]

Do you have Republican support for this? Does Senator Thune, given any indication he's going to give this a pathway to move forward?

BLUMENTHAL: Talking to my Republican colleagues, I am very, very hopeful about Republican support. Because among veterans in the United States, including the Veterans Service Organizations, like the Veterans of Foreign Wars and the American Legion, there is strong opposition to these shocking, cruel, cowardly, cuts.

We're talking about 80,000 jobs on the chopping block when there are already vacancies for 36,000 positions, including doctors, 2,500 of them, nurses, 16,000. And now they want to fire more of them, even as they are trying to recruit them. It makes no sense.

And it is a betrayal to our veterans, who are heroes, who have earned and deserve veterans' health care, the PACT Act benefits when they are exposed to toxic chemicals, other kinds of disability compensation. The V.A. is in crisis. It is imploding right now because of the cuts, freezes, and firings that the V.A. Secretary Collins has done at the behest, let's be clear, at the behest of Elon Musk and Donald Trump. They are trying to save more revenue so they can finance the tax cuts, which go to the ultra-wealthy, and it's on the backs of our veterans. I think veterans should be loud and vociferous and vehement in opposing these measures.

And my bill, the Putting Veterans First Act, would put back to work all of the veterans who have been fired, and all of the agencies of government, along with all of the V.A. employees who are so important to health care, providing the surgery and the diagnosis and the cancer screenings that are so important, and the service to veterans in disability benefits. And it would provide performance standards.

So they can't just fire people because they think they don't like them or they don't need them. There have to be performance-based standards tailored to the individual and appeals process for all of these veterans and military spouses, survivors, and veteran caregivers. We should care about them, too.

BOLDUAN: We've made a very grim picture of what things look like and could be looking like soon at the V.A. Senator Blumenthal, thank you for your time.

Sara?

SIDNER: All right. Thank you, Kate.

New this morning, authorities say newly released surveillance video shows missing college student Sudiksha Konanki moments before she vanished while on spring break in the Dominican Republic. In the video, Konanki is seen walking with a group of friends in the early morning hours last Thursday. A law enforcement official tells CNN a young man who stayed behind at the beach with Konanki that morning is not considered a suspect at this point, and they clarify he did not give significant inconsistencies in his account to police. CNN's Jessica Hasbun is in Punta Cana with the very latest on this.

This video gives you a sense of what she was doing and sort of where she was, but we still don't know anything about where she is now. What can you tell us the latest is there in Punta Cana?

JESSICA HASBUN, CNN CORRESPONDENT: Well, Sara, let me tell you, yesterday authorities ramped up that search. More than 300 agents, specialists, tactical units, and aquatic search teams have been deployed in the search for the 20-year-old University of Pittsburgh student Sudiksha Konanki, who was last seen, like you said, last Thursday.

According to the Dominican National Police, that search perimeter in the water has been expanded after conducting modeling studies. Authorities said Tuesday as the search for that young woman by land and air continues.

You mentioned that surveillance video from the hotel that that could be the last time Konanki was seen on March 6, according to law enforcement source, and that timeline shows us that at 4:15 a.m. Konanki is last seen entering the beach at this hotel, at the Hotel Rio Republica in Punta Cana, and at around 4:55, that group that was accompanying her is seen leaving the beach, and Konanki is believed to have stayed behind with that young man.

About four hours later, that same young man is seen leaving the beach. It wasn't until about 4 p.m. on March 6 that Konanki was reported missing by her friends, and according to a law enforcement source, Konanki's sarong cover-up was found on a lounge chair at that beach with no signs of violence. That young man, like you mentioned, who was last seen with Konanki, is not in custody and is not considered a suspect.

[07:45:05]

According to the National Police spokesman, the FBI, which joined the investigation just this Monday, has once again questioned several people regarding the case in addition to conducting new interviews, as they're also carefully looking and reviewing that hotel security camera footage. The young man, we were told by authorities, is in a hotel room under police surveillance while this investigation continues, although he is not -- he is not officially detained according to that source close to the investigation. The investigation, Sara, is ongoing with officials exploring all possible leads.

SIDNER: There are so many questions as to what happened to her, and they have not been able to find her, her family obviously in a panic over all of this.

Jessica Hasbun, thank you so much. Live there from Punta Cana for us.

Kate?

BOLDUAN: So a new space mission is underway to discover the origins of the universe. Easy-peasy, right? And President Trump turns the White House into a Tesla showroom in a wild show of support for Elon Musk.

(BEGIN VIDEO CLIP)

TRUMP: I love Tesla.

UNIDENTIFIED MALE: Which one did you buy?

UNIDENTIFIED FEMALE: Mr. President, which car are you going to buy?

TRUMP: The one I like is that one.

UNIDENTIFIED MALE: How does this work?

TRUMP: I want that same color.

(END VIDEO CLIP)

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[07:51:13] SIDNER: President Trump's trade war and constant back and forth on tariffs have sent shockwaves through the stock market and no doubt confused the consumer in the process. Hard hits to investment accounts, plummeting 401(k)s, all causing uncertainty and could set in panic.

Joining me now to sort this all out is Mark Zandi. He is the Chief Economist at Moody's Analytics.

Thank you so much for being here. Let me first ask you this. Is avoiding a trade war even feasible at this point?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Yeah, I think so. I mean, we're at the early stages. The President has put forward a lot of proposals for tariffs. And, you know, if he follows through, that will do a lot of damage and recessions even possible. But at this point, he's only implemented a very small part of what he has talked about. And if this is the end of the story and figures out a way to step back and cool things off, then yeah, the economy is very resilient.

You know, Sara, we came into the year with a very strong economy, creating lots of jobs, unemployment very low. It's been 4% for more than three years, which is, you know, hard to find a time in history when that's been the case. So we had a lot of things going for us.

So it should be able to digest a lot of storms. But if the President continues to pursue the trade war, yeah, that'll do a lot of damage for the recession. But it's not over yet. We could still avoid it.

SIDNER: It's interesting to say how we came into the year with a strong economy and a growing economy, because Trump says he was handed a terrible economy from President Biden. And he said his moves with these tariffs and other things are going to cause a huge boom in the country. Historically speaking, and economically speaking, how does that happen?

ZANDI: Yeah, I -- you know, I'm not a fan of broad-based tariffs. I mean, we've got a lot of experience over the decades, over the centuries with tariffs. And, you know, they don't work. They rate their attacks, you know, on consumers. You and I are going to have to pay more for everything that is imported into the country, if the president does follow through on all the tariffs that he's talking about.

So it's a tax in the form of higher prices, higher inflation. It hurts businesses that, you know, rely on imported product as well. I mean, they're making all kinds of things from airplanes to machinery to, you name it, and that requires imported product. You know, it invites retaliation. We see that today. The Europeans announced that they're putting tariffs on American products because of the tariffs we've imposed on them. That costs American jobs.

And perhaps the most pernicious thing, and the thing that's happened already, even though the tariffs have not even been put into place to any significant degree, is, as you pointed out, the uncertainty. You know, businesses just don't know what to do with all this. You and I as consumers don't know what to do with all of this, on again, off again, which products, which countries, over what period of time.

And it's doing a lot of damage. You can see it in the stock market. The stock market's down 8, 9, 10% from where it was just a couple, three weeks ago. So you add it all up. I just don't see the benefit here. I don't see the end game.

SIDNER: Could these tariffs that Donald Trump is putting in place cause the United States to go into a recession?

ZANDI: Sure. Yeah. I mean, it depends on how aggressively they're pursued. I think if all of the tariffs that have been talked about are actually implemented, and, you know, we're talking about the so-called reciprocal tariffs. These are broad-based tariffs against lots of different countries across lots of different products.

[07:55:01]

If all of that isn't implemented and maintained, you know, if it's, you know, on today, off tomorrow, that's one thing. But if it's on today and it's on tomorrow and the day after and the day after that, then, yeah, I think the prospects for recession are quite high later in the year. You know, the economy is strong. It came into the year doing very well, but it can't digest the kind of tariffs that we're talking about here. So, yeah, I think the recession odds are uncomfortably high, Sara, and are rising.

SIDNER: We are going to leave it there with that depressing statement from you, Mark Zandi. Thank you so much. Maybe one day we will talk and things will feel a little less depressing and confusing. I really appreciate you coming on this morning.

ZANDI: Will very nice (ph), Sara. Thank you.

SIDNER: All right, Kate?

BOLDUAN: So, panic and confusion at Chicago's O'Hare Airport. Early this morning, multiple shots were fired outside of a terminal there, and police say that they were called in to respond to a fight that was breaking out between several people on the street. A 25-year-old man was shot twice, is said to be in stable condition. Detectives are interviewing a second person, and one woman who was asleep feet away from where -- one woman was asleep feet away from where a bullet cracked the terminal glass. She says she is just grateful to be alive.

(BEGIN VIDEO CLIP)

RAQUEL BARAJAS, WITNESS: Honestly, these Dollar Tree Ear Plugs work really well because I have no clue how I did not hear this. And when I woke up and seen all the cops, I was terrified. So, I honestly, these might have saved my life.

(END VIDEO CLIP) BOLDUAN: Can you imagine? Oh, my God. Also, this morning, the Department of Education has announced plans to cut half of its workforce. According to a senior agency, official 1,300 employees are being notified they will receive severance pay based on their length of service.

Now, the Education Secretary, Linda McMahon, she confirmed yesterday that these firings are just the first step in changes to come. What are their plans to eventually completely shut down the agency, which President Trump has vowed to do. Formally eliminating the department, though, does, should require an act of Congress.

You are looking at the SpaceX Falcon 9 rocket lifting off overnight with two NASA missions on board. NASA's newest space telescope, SPHEREx, will spend two years orbiting the Earth, collecting data on galaxies and more than 100 million stars to help us better understand the evolution of the universe.

The second mission, called PUNCH, will focus on the sun's impact on the solar system. NASA's hoping this will help more accurately predict the effects of space weather on Earth. Fascinating.

A heartwarming reunion in Southern California. 82-year-old Katherine Kiefer thought that she had lost her cat, Aggie, in the Palisades fire until this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You want to hold her?

KATHERINE KIEFER, CAT OWNER: Hi, sweet girl. Baby. Oh, baby, oh. I'm so happy to see you. Hi, baby.

UNIDENTIFIED FEMALE: We'll take all the time you guys need, OK?

KIEFER: OK. Thanks. Hey, Aggsie.

UNIDENTIFIED FEMALE: Oh. Hi, Aggsie.

(END VIDEO CLIP)

BOLDUAN: You can imagine how much that means to someone who's lost everything.

Aggie was found near the owner's home, surviving in the ashes, and she's now getting some special care. And she's definitely some TLC from her owner. So then she'll go home to Katherine. Pretty amazing.

So let's turn to this. Scariness. New data showing that Arctic sea ice hit its lowest level ever recorded in February. And it comes, as we know, President Trump has vowed to and is gutting federally funded science agencies and pulling the United States further and further away from global climate change programs.

CNN's Bill Weir has the details on this. What's the latest? What are you learning with this new data? BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT: Well, it's a stark reminder that while Trump trumps and DOGE doges, the ice is melting.

BOLDUAN: Yes.

WEIR: And the planet is overheating. Let me just start with air temperatures. This is looking down at the North Pole from the top. This is Greenland where the United States, Canada is over here. 36 degrees above normal last month. Fahrenheit. 36 degrees above normal. 20 degrees Celsius. So it is scorching hot at the top of the Earth as a result.

BOLDUAN: No, we're talking like fractions of degrees.

WEIR: No, no, 36 degrees Fahrenheit above normal in February in the Arctic. And so as a result of that, the ice, the land ice on Greenland, for example, sheds hundreds of billions of tons a year. Enough ice to cover Manhattan in ice two feet high or two miles high.

Well, imagine two miles thick of ice over Manhattan. That's how much is just coming off the land. But what we're talking about is the sea ice, the floating ice. And this is when it's at its highest as there's so much ice built up. And as it comes down, it melts. The extent right now is millions of square miles below what is normal right here.

[08:00:05]

And so we're headed towards ice free summers in the Arctic by 2050.