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White House Cancels Press Conference With Benjamin Netanyahu; CIA Reviewing Use of Lethal Force Against Cartels?; Trump Threatens Even More China Tariffs. Aired 1-1:30p ET

Aired April 07, 2025 - 13:00   ET

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

[13:00:40]

BRIANNA KEILAR, CNN HOST: Market whiplash. After an erroneous report about President Trump's global trade war and after starting the day in bear market territory, stocks rose into the green, only to come back down once again. We will explain what is driving those dramatic swings.

In the meantime, negotiations behind closed doors ramp up. This hour, Israeli Prime Minister Benjamin Netanyahu will arrive at the White House to talk face-to-face with President Trump.

BORIS SANCHEZ, CNN HOST: And later: Sources say the CIA is reviewing whether it can legally use lethal force against Mexican drug cartels.

We're following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

Thank you so much for sharing your afternoon with us. I'm Boris Sanchez with Brianna Keilar in the nation's capital.

And we are standing by for a critical first in President Trump's escalating trade war. Just moments from now outside the Oval Office, the president will welcome Israeli Prime Minister Benjamin Netanyahu to the White House. In doing so, he kick-starts face-to-face talks for trade negotiations.

Of course, Israel is just one of the 185 countries and territories that have been hit by Trump's tariffs.

KEILAR: That's right. Over the last few hours, the U.S. stock market seeing some wild swings after starting the day in bear, as the world now watches to see if Netanyahu can strike a deal.

So far today, Trump has threatened a extra 50 percent tariff on China, has said Japan is ready to negotiate, told Americans to -- quote -- "Don't be weak, don't be stupid," as he urged patience, not panic.

Let's go live to the White House and CNN chief national affairs correspondent Jeff Zeleny.

Jeff, there's a lot riding on these next few hours. Walk us through what's about to go down here.

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: There certainly is, Brianna.

And President Trump is showing no signs of ramping down his escalating trade war, in fact, adding on to it, sending out a message just a couple hours or so against, China, threatening an even another piece of a retaliatory tariff on China, a 50 percent tariff on top of the 34 percent tariff he imposed last weekend.

So, look, what the bottom line of this is, this whiplash roller coaster that the market is enduring is looking directly at the Trump administration. So, yes, this is the first meeting, the first face-to- face meeting, although much to discuss between Prime Minister Netanyahu and the president as well.

But the president's top economic adviser, Kevin Hassett, had this to say earlier, trying to calm the markets.

(BEGIN VIDEO CLIP)

KEVIN HASSETT, DIRECTOR, NATIONAL ECONOMIC COUNCIL: I have seen some deals that are great, and the President Trump is -- and President Trump is going to decide if they're great enough.

Israel is the first meeting today, but President Trump has talked to world leaders all weekend, and a whole bunch of countries have been talking to Jamieson Greer and Howard Lutnick over the last few weeks so that, if we did pass the reciprocal tariffs, that they'd be ready with parameters of what might make a good deal.

(END VIDEO CLIP)

ZELENY: So, as we begin a new week here at the White House, the president is being urged by many supporters and critics alike to find an off-ramp or better explanation for the tariff policy he imposed last week.

Of course, one of the elements of that took effect on Saturday, that 10 percent tariff to most countries, but the next wave is taking effect on Wednesday. That is the much larger, he calls them reciprocal, but the much larger tariffs go into effect.

So, a question here is, will there be a change between now and Wednesday? He's been urged by many supporters and others to put a pause on this. So far, he has not indicated he is likely to do so, but the president will be holding a news conference this afternoon with the prime minister. We shall see what he says there -- Boris and Brianna.

KEILAR: All right, we will definitely be looking for that.

Jeff Zeleny, thank you.

And let's take a closer look at the markets now. Matt Egan has been closely tracking the turbulence today.

So, Matt, tell us how things are looking right now. MATT EGAN, CNN REPORTER: Well, Boris and Brianna, this has already

been one of the wildest days on Wall Street in recent memory, and there's still almost three hours of trading left to go.

U.S. stocks plunged at the open, with the S&P 500 going into bear market territory, which signals a 20 percent decline from previous highs. But then everything turned around, and you could see it on your screen. If we can go back to the Big Board, you could see the market turned around, went sharply positive on that rumor of a 90-day pause in tariffs.

[13:05:13]

Now, it was just a stunning move higher. It was actually an 8 percent reversal from the bottom of trading, from the lows of the day to the highs. That is just a wild move. But, as you can see, it completely vanished when investors realized that it was just that, just a rumor. The White House called it fake news.

I talked to market veteran Art Hogan, and he told me that was a good example of what would happen if we actually got some rational thought mixed in with the ignorant tariff policy. And, to his point, I do think that that episode underscores the broader message from the market.

Investors are very worried that the president is making a policy mistake here, perhaps a historical policy mistake. Every single time that trade tensions go up, we see the market go down, and even just the rumor of de-escalation was enough to send U.S. stocks sharply higher.

Now, speaking of escalation, Trump did mention in that TRUTH Social post earlier today that, if China does not withdraw its retaliatory tariffs by tomorrow, then, on Wednesday, the United States will increase tariffs on China by another 50 percent, just another reminder of the escalatory cycle that you can kind of get stuck in.

And, in that same message, Trump also said that negotiations with countries who want to talk will begin immediately, so just a classic Trump post there, where he manages to both escalate and offer some sort of glimmer of hope that maybe things can calm down a bit.

So, meanwhile, traders, investors, they're all sort of just left dizzy and frustrated by all the ups and downs here -- Boris and Brianna.

SANCHEZ: And, Matt, business leaders are now starting to speak out. What are you hearing from them?

EGAN: Yes, that's right. We are increasingly hearing from some CEOs.

Jamie Dimon warning in his annual shareholder letter this morning that, yes, tariffs, they could increase inflation. They risk a recession. Goldman Sachs bumped up the recession odds to 45 percent. Some are even invoking Smoot-Hawley, the historic, infamous tariff increase in 1930 that worsened the Great Depression.

Take a listen to former St. Louis Fed President Jim Bullard earlier today on CNBC.

(BEGIN VIDEO CLIP)

JAMES BULLARD, FORMER PRESIDENT AND CEO, FEDERAL RESERVE BANK OF ST. LOUIS: That this has dramatically raised the risk of a Smoot-Hawley- type outcome. So Smoot-Hawley was 1930. Other countries retaliated, global trade collapsed, and the Great Depression was on.

So I think that's really what has people worried about this. It doesn't have to work out that way.

(END VIDEO CLIP)

EGAN: Now, perhaps the most startling warning came from hedge fund billionaire Bill Ackman, who last night was basically pleading on social media with the president to pause this trade war.

And he said: "The president has an opportunity on Monday to call a time-out and have the time to execute on fixing an unfair tariff system. Alternatively, we are heading for a self-induced economic nuclear winter, and we should start hunkering down."

Very strong words there, especially considering Ackman, he backed Trump in this election.

SANCHEZ: Yes, really stunning words.

Matt Egan, thank you so much for the update on markets.

These wild swings are happening as President Trump has yet to even hit 100 days in his second term.

CNN chief data analyst Harry Enten is with us now.

Harry, how unusual is this drop in the S&P 500 specifically under President Trump?

HARRY ENTEN, CNN SENIOR DATA ANALYST: It's historic. It's historic.

I mean, look. We have never quite seen anything quite like it. Let's just kind of look at the two presidents since the S&P 500 was, of course, created as an index back in 1957 who saw at least a 10 percent drop up to this point in their presidency. There are two guys on your screen, right?

There's George W. Bush. It was a 16 percent drop. You see 15 percent here, but now, with the new market declines today, we can cross that out and we can go to 17, 17 percent. That is literally the volatility that we're dealing with in the markets. I'm literally typing it in on my computer to calculate it out just beforehand.

Now we're at the greatest decline ever through this point in a presidency. Donald Trump owns it. But it's not just that the markets have declined, right? These levels are kind of similar. It was what was happening before Donald Trump took the White House and entered the presidency back in January. That is, there was a bull market. There was a bull market. When George

W. Bush took control of the White House, there was, in fact, not that. The market was declining, going down because of the dot-com bubble burst. In this particular case, Trump had, in fact, a bull market.

And he is on the precipice, as Matt was talking about, of turning a bull into a bear, the fastest guy ever to do it in the history. The markets do not like what Donald John Trump is doing, guys.

[13:10:08]

KEILAR: And so you have the markets, right, you have Wall Street, and then you have Main Street. And I think people want to differentiate between the two.

Are the two really that separate in these effects?

ENTEN: I don't think that they are.

What happens on Wall Street doesn't stay on Wall Street. It leaks out into Main Street. And one of the reasons why that happens is, I think there's this idea, who's invested in the stock market? It's the majority of Americans who are invested in the stock market in one way or another, 401(k)s, Roth IRAs, or owning individual stocks or mutual funds. It's 62 percent.

This is not 1974 anymore, when just 23 percent of Americans were involved in the market. The bottom line is this, and that is, the majority of Americans are feeling the pain right now that the stock market decline is inflicting because the majority of Americans are involved in the stock market. This ain't 50 years ago anymore. This ain't the economy of Richard Nixon. This is the economy of Donald Trump.

SANCHEZ: And, Harry, how does that translate politically? How are voters feeling about Trump and his impact on the economy?

ENTEN: Not good. Not good.

I mean, look, let's take a look at his net approval rating on the economy. This was always the strength of Donald Trump in his first term. He was on the plus side of the ledger plus-five points in April of 2017. Where is he now? He's at minus-12 points way, way, way, way underwater, and indeed he is further underwater than any president at this point so soon in their presidency.

Americans do not like what's going on in the economy right now. They don't like what's going on in the stock market right now, and they are taking it out on Donald Trump, at least according to the polling data, though I wouldn't be surprised if this number falls even further as we get newer data, given the stock market declines that we have been seeing.

KEILAR: All right, Harry Enten, thank you so much.

ENTEN: Thank you. KEILAR: Let's talk more now about the impact of all of this with

chief economist from Moody's Analytics Mark Zandi.

Any sign, Mark, that the market may be finding a bottom or stabilizing?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: No, not at all.

I mean, it's all over the map because it's just trading on news about the trade war, up one minute, down the next. I have never seen hard -- rarely seen anything like that. I think you maybe, if you go back into the great global financial crisis, there was a day or two when that happened.

But I think markets are just focused exclusively on the trade war. And until there's a clear sign that that's going to start going in the other direction, start winding down, as opposed to escalating, I just don't see markets finding the bottom. There's a lot more red on screens to go here before we find that.

(DOGS BARKING)

SANCHEZ: It sounds like one of your pups or two might be trying to find the bottom of the market right now in the background as we speak, Mark.

(LAUGHTER)

(CROSSTALK)

SANCHEZ: I do want to point out, though, that there's this green spike in what looks like a sea of red.

And that was apparently this rumor that surfaced that the administration may want to pause tariffs. That was earlier in the day. I mean, that just speaks to the hunger among folks...

ZANDI: Yes.

SANCHEZ: ... that are invested in the market for there to be some kind of relief, some kind of daylight from what looks to be like certain tariffs come April 9.

ZANDI: Yes, Boris, a trade war, a global trade war is really, really bad for business, right? It's a massive tax increase on American consumers, particularly lower- and middle- income households, and it crushes businesses that sell to those consumers, but also buy a lot of imported product to produce whatever they're producing.

So this hits the sales. It hits revenues. It raises costs. It lowers profitability. So, for a stock investor, you're looking at this and saying this is about as bad as it can possibly be. And until they hear more -- some really good concrete news on what's happening with the trade war, I just don't see this market coming back.

And we're going to see this trading on rumors. And that's the other thing, of course. You know, the -- this up and down and all around, it goes to the -- just the -- kind of the uncertainty that's being generated by the kind of lack of any consistent messaging around what's going on.

You know, why are we doing this? You know, what's the purpose of this? Where -- what's the motivation, and what's the goal? You know, and we don't have any of that, so the market's kind of completely rudderless, and so any -- grasping onto any news, good or bad, and running with it, to the tune of 1,000 points on the Dow, which just can't be good for anything.

KEILAR: And Trump is now threatening, Mark, this additional 50 percent tariff on China if Beijing doesn't back off its impending retaliatory tariff by tomorrow.

What do you expect will happen, and what impact should American consumers expect?

ZANDI: You know, it just feels like the Chinese are as dug in as we are around these tariffs.

I just don't see them backing down. I mean, they're all in, yes. So, if the president decides to go with 50 percent higher tariffs, I suspect the Chinese will come back with the same, and we're going down a really dark path. I just don't see how this plays out well for anybody.

[13:15:09]

I mean, obviously, this is going to hurt the Chinese economy very badly. They rely on us as an export market, but it's going to hurt us really badly. This is the -- the -- we're the two largest economies on the planet by orders of magnitude. And if we can't figure this out, it's going to be damaging not only to our economies, but the entire global economy.

So I don't know. I'm confused by it, very perplexed. I just, at this point, don't see how this is going to play out. And, by the way, if I can't figure it out, if I don't even -- if I can't even give you a story as how this is going to play out, you can imagine what other people are thinking that are in the market.

It's just -- it just feels pretty ugly to me.

SANCHEZ: So, Mark, you don't subscribe to the idea that somehow, by installing these tariffs and resetting the global trade order, there's going to be some great benefit for Americans, whether in the form of expanded manufacturing or national security? That doesn't resonate with you?

ZANDI: Not at all. I mean, really?

I mean, look. I'm just -- put yourself in the following scenario. I'm the CEO of a global vehicle manufacturing firm, right, and I'm trying to make a decision what to do about these -- these tariffs and whether I should locate a new factory in the United States of America. And I sit down and I start thinking about this for a second. Then I

realize I don't even know what the tariffs are going to be tomorrow, let alone what they're going to be three years or four years from now, when that plant's going to be finished or 10 or 20 years from now, when that plant's still in operation.

And we're not talking about small tariffs. These are massive tariff increases that can change the business model upside down in an instant. So, no, I just don't see it.

And here's the other thing. At some point, this is going to get into the legal system. It already is. Are these tariffs legal? And will a future Supreme Court strike them down? And, again, put yourself in the position of that CEO. What do you do with that?

I mean, so would you really locate in the United States? Would you really expand in the United States, when you have no idea what those tariffs are going to be? So I just don't get it. I don't understand how this works. I don't understand how it brings manufacturing back.

By the way, Boris, even if it brought manufacturing back, it's not going to bring back jobs, not to any significant degree. the manufacturing base, which is what we're talking about here, is 10 percent of overall employment. I'm making up the numbers a little bit, but roughly 10 percent.

If it's having a great year or two, maybe it's creating 10,000, 20,000, 30,000, 40,000, jobs. It's not creating 200,000, 300,000, 400,000, jobs. It's not creating two million, three million, four million jobs. So even if you have succeeded in getting manufacturing back -- and, by the way, I don't think that's going to happen.

But even play the mind game, say that's coming back, you're not going to -- what jobs are you going to get? And so I'm totally confused, flummoxed by the whole thing.

SANCHEZ: Really a historic moment, no doubt, with questions yet to be answered.

Mark Zandi, always appreciate your analysis. Thanks for joining us.

ZANDI: Sure.

SANCHEZ: Stay with us.

We're not getting off this roller-coaster ride that is the markets. You just heard Mark Zandi describe just how much of a roller-coaster ride it is. President Trump is expected to meet with Israeli Prime Minister Benjamin Netanyahu at the White House in just a moment to talk -- at any moment to talk tariffs. We're going to bring it to you when it happens.

Also ahead: Sources tell CNN that the CIA is now reviewing its rules to potentially use lethal force against drug cartels.

KEILAR: And then later: how HHS Secretary Robert F. Kennedy Jr. is responding after a second American child dies from measles.

You're watching CNN NEWS CENTRAL. We will be right back.

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[13:23:02]

SANCHEZ: New today, CNN has learned that the CIA is reviewing its authorities to use lethal force against drug cartels in Mexico and other countries, as President Trump has made taking on the cartels a top mission for the agency.

KEILAR: This comes after the Trump administration designated a number of cartels as foreign terrorist organizations earlier this year.

CNN national security reporter Zach Cohen has more on this story.

All right, what types of things are they looking at here?

ZACHARY COHEN, CNN NATIONAL SECURITY REPORTER: Yes, guys, the CIA wants to know, what is both legal under the law of armed conflict, and, also, what are the potential repercussions if they do carry out a range of options, which really covers anything from sharing intelligence about targets, potential targets, with a foreign partner like, say, Mexico, so they can carry out a lethal strike against these cartel groups or taking direct action themselves?

And this review is really all about looking at the possible risks associated with those varying options that's really this new suite that is under consideration by the CIA. And one source put it really bluntly to us and said -- quote -- "It's not a question of whether they can or cannot use lethal force. They can. It's more about the implications of Americans being potentially injured or killed based on their broader presence in the space."

So, obviously, if you take Mexico, right, there's a higher risk of potential collateral damage, Americans being injured or killed in a possible strike. So that's really what the CIA review is focused on now. And it's really a reflection of this pressure national security officials feel by the Trump White House to ramp up this pressure on the cartel groups.

This is something that Donald Trump, as you said, has made clear is a top priority for him, and something the CIA specifically has been focused on. We know the White House has designated several cartel groups as foreign terrorist organizations. We know the CIA is already flying drones, unarmed drones, over Mexico.

These are drones, though, that could be potentially armed, so now the CIA really exploring the possible risks of taking that next step.

KEILAR: Yes, really amping up those flights, as we have learned in some of your recent reporting.

Zach, thank you so much for that. Really appreciate it. And this just into CNN: The White House has canceled today's press

conference with -- with President Trump and Israeli Prime Minister Benjamin Netanyahu. This is a really big change.

[13:25:10]

Let's go to Jeff Zeleny, who's at the White House.

Jeff, are they explaining why?

ZELENY: At this hour, they are not explaining why. The press conference was scheduled to take place at about 2:30 Eastern time with President Trump and Prime Minister Netanyahu.

It would have been their second formal press conference back. There was one in February and one this afternoon. It was on the schedule. It's been on the schedule for several days. But the change here, the White House officials are saying that they will still potentially take questions in the Oval Office in a more informal setting, but that formal press conference in the East Room of the White House, which has been set up for this, has now been canceled.

It would be impossible to not think that the stock market and what is happening in the economy and the financial markets are not taking some role in this. So, the president has been usually speaking after the market closes every day to answer questions about tariffs and his tariff policy. Of course, the White House has been pushing back on the idea that there would be any type of a pause on this policy.

And the prime minister is just making his way behind me here to the White House for that meeting with the president. But the formal press conference is not happening. And, again, just coming a couple hours before the markets would close, one has to think that there is a correlation there.

SANCHEZ: Jeff, please stand by.

We are watching the arrival of Israeli Prime Minister Benjamin Netanyahu to the White House, and you see President Trump there standing outside at the West Wing ready to receive the prime minister.

Let's listen in, a firm handshake, shouted questions, but no responses as President Trump walks into the West Wing now with the prime minister of Israel. Clearly, we're trying to figure out why this press conference was canceled. As we just heard from Jeff Zeleny, there had been a stage set up, in the East Room at the White House.

It was on the schedule for the day. And, literally, just moments ago, just about an hour from when it was set to start at 2:30, the plug gets pulled on it. Notably, there will still be questions taken at the Oval Office, but it's important to differentiate the setting, because it is a difference in access that reporters get, not only to the president, but to the prime minister as well.

When you're in that Oval Office setting, it's a select pool of reporters, not a broader range of correspondents representing all sorts of media organizations able to raise their hands and ask questions.

KEILAR: And you would expect, during a press conference, which still there's less questions than I think we would like as the press...

SANCHEZ: A hundred percent.

KEILAR: ... but, at the same time, the questions that you generally hear in one of these press conferences -- and we will have to wait and see what the pool asks...

SANCHEZ: Right.

KEILAR: ... because, obviously, they're going to be asking some things that would be in that press conference -- are the news of the day...

SANCHEZ: Yes.

KEILAR: ... that are so important.

And, obviously, they go to great strides to make sure that questions that need to be answered, they are asking. But, also, this is just kind of a perfunctory part of a visit for someone like Bibi Netanyahu.

SANCHEZ: Yes.

KEILAR: This is a White House that has canceled -- recently, I think of President Zelenskyy. This reasoning is probably going to shape up to be significantly different. So this has happened with this White House, but this is still extraordinary.

SANCHEZ: Yes, really a surprise.

We will, of course, keep monitoring what is happening at the White House and bring you the latest as we get it.

And still to come, look, it's been a wild day on Wall Street, and perhaps that may be why the president doesn't feel inclined to answer a broad range of questions, Trump, of course, threatening China with even more tariffs.

We're going to speak to a Trump supporter impacted by the trade war and hear his message to the president in just moments.

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