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Markets Open Higher; Tariffs Set to Take Effect At Midnight; Recommending Florida Removal from Drinking Water; Florida Wins in 65- 63 Thriller. Aired 9:30-10a ET
Aired April 08, 2025 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:30:00]
KATE BOLDUAN, CNN ANCHOR: Just feeling a better mood this morning.
What is driving the mood? CNN's Matt Egan has all of the answers for us, as we're going to watch it open up in a second.
What is lifting the mood, at least as we've been seeing in futures this morning?
MATT EGAN, CNN REPORTER: Well, Kate, clearly some of the fear that had just been rocking financial markets around the world has started to ease a bit. Some of this might be technical, right? Anytime you see really, really steep drops, you're going to see people kind of dip their toes back in. Some people are clearly betting that the selling was overdone.
But a lot of this, obviously, goes back to the trade war itself, right? The message from the market has been really, really consistent for the last week or two.
BOLDUAN: Yes.
EGAN: Investors are freaking out that if the president spikes tariffs to the highest level in more than a century, that that could really hurt the economy. And we're seeing U.S. markets open, look at this, 3.5 percent higher for the Dow, S&P 500. So, this is a surge here for U.S. markets at the opening bell.
And I think that investors - so they're worried that tariffs will be bad for the economy. And any hint, even a rumor of a de-escalation -
BOLDUAN: Yes.
EGAN: Has been enough to send U.S. markets significantly higher. I talked to Keith Lerner over at Truist, and he said, look, there is a battle between fear and greed right now. And this creates a tug of war. Wide swings each day should be the norm as this battle endures. So, fasten your seat belts because we could see more ups and downs.
But what's ironic here, Kate, is that the catalyst was actually a bogus news report yesterday, right? There was this erroneous headline suggesting there'd be a 90 day pause in tariffs, and that triggered this historic reversal for the S&P 500 yesterday. The White House quickly shot it down as fake news. And yet, you know, it was eye- opening because it showed that there is an off ramp here and that it wouldn't take that much of a de-escalation for U.S. stocks to be -
BOLDUAN: Right, I mean they were looking for anything.
EGAN: Right. Exactly.
BOLDUAN: I mean, and then this morning, the president just put out on social media about having a call with the acting president of South Korea, talking about their tremendous and unsustainable surplus tariffs, all sorts of things, and saying that a - that, you know, they could be looking at a great deal for both countries. I mean he's talking now about negotiations over tariffs.
EGAN: Yes. And most importantly in that Truth Social post, he also suggested that there is room to negotiate with China, claiming that China wants to make a deal, they just don't know how to get it started. But signaling an openness to negotiations, which is really a big deal because we're potentially hours away from the U.S. sending tariffs on China dramatically, dramatically higher. And that would be a big escalation in a trade war between the world's two biggest economies. Investors are hoping that does not happen.
BOLDUAN: Well, I mean, it's - right now it's hoping -
EGAN: Yes.
BOLDUAN: Because right now it's not clear if it is direct - if it is a negotiation or if these tariffs are permanent. And John Berman's deciding to do some math.
JOHN BERMAN, CNN ANCHOR: Yes, this is going to blow your mind here. Look, we're going to get back to what you guys are talking about in the market futures in just a second here. And President Trump clearly opening the door more than he has yet to this point on the idea of negotiations.
But put that aside for a second, because if these tariffs go into effect at midnight tonight, the American Enterprise Institute, a conservative think tank, now points out their plans contain math errors. Serious math errors. The formula even received criticism from supporters of the president. Republican mega-donor and Home Depot founder Ken Langone calls the tariffs, quote, "bullshit," saying in an interview with "The Financial Times," quote, "I don't understand the goddamn formula. I believe he's been poorly advised by his advisers. And this trade situation and the formula they're applying."
With us now are the two people who pointed out what they say is a major math error, Dr. Kevin Corinth and Dr. Stan Veuger.
Thank you both so much for being with us. Our viewers are going to be super excited to see this formula on the screen here. And it's going to mean a ton to them. I'm about to commit serious TV crimes by asking you to explain this. But let me just point out, what this essentially is, is that the change in tariffs right here that the president has proposed is equal to the country's exports to the U.S., minus the imports from the United States, divided by these three things, OK. And you say, these two things, the White House has got it completely wrong. Their math is wrong. This isn't about bad policy, you say, although it may be ultimately, but you say it's about bad math. Explain.
DR. STAN VEUGER, SENIOR FELLOW OF ECONOMIC POLICY STUDIES, AMERICAN ENTERPRISE INSTITUTE: Well, the formula you have there, basically what it does, it divides the trade deficit, which is the numerator here by total imports, which is the m in the denominator. And then to make the - to make their approach look a little more sophisticated, they added those two Greek letters, epsilon and phi.
[09:35:01]
The epsilon they set at four, and phi they set at 0.25. So, they cancel out in their - in the U.S. trade representative's report on the matter.
Now, they claim that they picked that value for phi, which is the change in import prices when a tariff changes. They claim that they picked that 0.25 based on a result in a research paper. But they picked the wrong number. That number should be close to one.
Now, one, of course, is four times as big as 0.25. So, if you put in the right number, the change in the tariff goes down by a factor of four. And so, every tariff they calculated based on this formula is four times higher than it should be.
So, what does that mean?
BERMAN: So -
VEUGER: Yes.
BERMAN: Go ahead. Go ahead. What does it mean?
VEUGER: The highest tariff rates - yes, go ahead. The highest tariff rates they came up with were close to 50 percent. If you divide them by four, goes down by a lot, as you can see here.
BERMAN: I have this -
VEUGER: And so, if they had done the calculations correctly, thank you for putting them on screen, we would have ended up with a set of tariffs that barely exceeds 10 percent in any country, with the top rate being below 14 percent.
So, massive differences for a number of important trading partners, including Cambodia, Vietnam, Laos. And so, this, you know, we can - I don't think this - much of the approach makes sense, even conceptually. But if we're going to take their approach seriously, if we're going to say we're going to base our tariffs, our entire international trading system on this formula, they have to put in the right numbers and do the calculation correctly.
BERMAN: And again, this is just - it's all about this number right here, which you say is four times bigger than they say it is, which throws all their math by a factor by four. Have you taken this to them? Do they acknowledge that they have a bum number in here?
VEUGER: So, they have not - so, a cabinet member has been asked about this. Peter Navarro was asked about this yesterday morning. They have not disagreed with us on the substance. In fact, what we've seen is that senior members of the administration, Steve Miran, yesterday, who's the chairman of the Council of Economic Advisers, Scott Bessent, this morning, who' the Treasury secretary, they have both said, we had nothing to do with this formula. That was other people in the administration.
And so, you know, normally, if you're convinced of the accuracy - the wisdom of your policies, you do not point fingers at other people in the administration, say, they came up with this, we did not.
BERMAN: And, Dr. Corinth, just to reiterate that point, they're pointing the fingers at each other here. This is not a small difference. You can see, Cambodia's tariffs are four times bigger than they would be if the math had been correct by your calculations. And those poor Falkland Islands, right, down there, I mean, what they must be going through because of this math error.
So, bad math. And then - and then, Dr. Corinth, the policy itself. You note using the idea of a trade imbalance here kind of ignores other factors.
DR. KEVIN CORINTH, ECONOMIST, SENIOR FELLOW AND DEPUTY DIRECTOR AT AMERICAN ENTERPRISE INSTITUTE: Yes and, you know, it's important to point out that we're talking about corrected tariffs. These are not the correct tariffs. We're just saying, if you apply their formula correctly, they should have been a fourth as high as what they're saying they should be.
But we are not at all endorsing this approach. It does not make sense to say that tariffs are only based on - or that - that - on trade deficits or the trade deficits only depend on tariffs. So, there's a lot of other factors like its comparative advantage, different geographic factors that determine the trade deficit. To say that we should only base these tariffs on the trade deficit is just bad economics.
BERMAN: And Dr. Corinth, while we have you here on the subject of economics, and I know you guys aren't market watchers the way that some, you know, investment analysts might be, but the market futures are up today, right now, on the idea that all of a sudden the administration might be more willing to negotiate with certain countries than others. Does that make sense to you now that - that negotiations might be pushing the markets up?
CORINTH: Yes, I think it suggests that, you know, the tariffs are actually - I think it suggests that the tariffs are actually - would be very damaging if there is - if small changes in the rhetoric of the administration can push up markets this this much, it suggests that the market reaction would be even larger if these tariffs were made permanent. BERMAN: I can say, Dr. Corinth, Dr. Veuger, this formula now will be
seared in the brain of all of our viewers. I appreciate you explaining it so well.
Kate.
BOLDUAN: They actually really did explain it so well. Looking at the symbols makes no sense. But the way they explained it makes sense. Less -
BERMAN: It's all about - yes, elasticity. We'll talk about elasticity, you know -
BOLDUAN: All day long.
BERMAN: Until the cows come home.
BOLDUAN: Coming up for us, why is RFK Jr. now targeting fluoride in drinking water when the CDC, which he now oversees, calls it one of the ten great public health achievements of the 20th century.
We'll be right back.
(COMMERCIAL BREAK)
[09:44:36]
BOLDUAN: HHS Secretary Robert Kennedy Jr. now says he plans to direct the CDC to stop recommending fluoride in public drinking water. Kennedy was just in Utah yesterday to highlight this very thing, as Utah is the first state enacting its own fluoride ban.
CNN's Meg Tirrell has much more on this.
And there are a lot of questions around this, Meg, because, one, you have to wonder why he is targeting fluoride in drinking water when his own CDC now calls it one of the ten great achievements in public health in the 20th century.
[09:45:13]
MEG TIRRELL, CNN MEDICAL CORRESPONDENT: Yes, well, fluoride certainly isn't the only thing that Robert F. Kennedy Jr. and the traditional CDC have disagreed on. And we're seeing that play out with vaccines, for example.
In terms of fluoride, he has focused on what he sees as health risks with fluoride. He says not only is he going to direct the CDC to recommend that water systems remove fluoride from the water, but he's also going to reconvene a preventive services task force to examine the issue. We'll see whether that's kept as an independent panel and what they recommend.
We also heard that the EPA is going to revisit science on this. And the EPA is the agency that sets the ceiling really for safe levels of fluoride in water. Here's both Robert F. Kennedy Jr. and the EPA administrator yesterday
in Utah talking about this.
(BEGIN VIDEO CLIP)
ROBERT F. KENNEDY JR., HHS SECRETARY: In the era of fluoridated toothpaste and mouthwashes, it makes no sense to have fluoride in our water. The evidence against fluoride is overwhelming.
And I'm very, very proud of this state for being the first state to ban it. And I hope many more will come.
LEE ZELDIN, EPA ADMINISTRATOR: As soon as I was nominated by President Trump as administrator of the EPA, the secretary instantly reached out to start talking about issues that he is so passionate about. And number one on that list was fluoride.
(END VIDEO CLIP)
TIRRELL: Now, Kate, a lot of the debate around fluoride comes from studies looking at fluoride in water at levels much higher than are recommended in the U.S. The current level is 0.7 mg/l. And at that level, studies haven't shown these kinds of health concerns, which the predominant ones are around children's IQ.
And we should note, Kate, that counties in Utah where it's just been banned are in favor of water fluoridation. Some of them at least. Salt Lake County, for example, voted to include it in their water. This is typically been a local issue. We'll see if that starts to change.
BOLDUAN: Yes, I mean, the ADA, the American Dental Association has pointed to what fluoridated water does and how it has contributed to - to stopping tooth decay by a great degree in adults and children. How much of the United States currently has fluoridated water?
TIRRELL: Yes, about 63 percent of the U.S. population right now is on these systems. And the concern, of course, is when you take this out, you can access fluoride in other ways, but it will hit lower income families the hardest because they may not be able to afford dental care and fluoride products.
BOLDUAN: Yes, that is one of the great concerns, especially in Salt Lake when they were talking about that as well.
It's great to see you, Meg. Thank you so much.
Let's go now to the one and only Sara Sidner in San Antonio.
SARA SIDNER, CNN ANCHOR: We are here doing celebrations. But - you think the markets have caused anxiety? I haven't had more anxiety watching a game my whole life. The Cougs and the Gators going at it for the national championship. The basketball men's team on both sides playing great games. We'll have highlights for you and give you a sense of who won. I mean, I am a Florida Gator, and I'm going to say it. We did. Sorry, broke the tease up. See you in a bit.
(COMMERCIAL BREAK)
[09:52:49]
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It's a great day to be a Gator. They win the national title.
(END VIDEO CLIP)
BERMAN: Florida, national champions, winning the NCAA men's tournament. The unquestioned star of March Madness, earth's number one Florida Gator, the ever punctual Sara P. Sidner, in San Antonio, where it all happened.
BOLDUAN: There's a lot you added in there. A lot in there.
SIDNER: Yes. OK, I hear you burning me, John Berman, and we are going to talk when we get back.
But, you know what, you can't hurt me after that game. You can't mess with me. Did you see that? It was so stressful for most of the game. The Florida Gators were behind. I thought I was losing my mind.
But then, bless him, Walter Clayton Jr. came out, tied up the game, and that was when the Gators started rolling. And they finally, in the end, with just two points, rolled over those Houston Cougars.
Here's how we all reacted as fans afterwards. There was screaming and there were tears.
(BEGIN VIDEO CLIP)
SIDNER: OK, describe the game.
ANDY SCHOLES, CNN SPORTS ANCHOR: I mean, it is so - no, so stressful.
SIDNER: It's not even fun because it's so stressful. But it's fun. But it's stressful. And we can't be friends. Not right now.
SCHOLES: I - I just - I - it's going to be a long three - three minutes of (INAUDIBLE).
(END VIDEO CLIP)
SIDNER: So that was me and our Andy Scholes from CNN Sports. We were not friends. We still are not friends right now. Give it about another day and it will be OK. He is upset and his team played really, really well. They were beating us most of the game. But then we ended up doing this to them. We won. Here's how we reacted.
We don't have that video y'all. We must have it. Do you guys have the video?
(BEGIN VIDEO CLIP)
SIDNER: Whooo!
(END VIDEO CLIP)
SIDNER: There it is.
(BEGIN VIDEO CLIP)
SIDNER: Whooo! Oh, my gosh! Ahhhh!
UNIDENTIFIED MALE: Go Gators!
(END VIDEO CLIP)
[09:55:07]
SIDNER: OK.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Go Gators!
(END VIDEO CLIP)
SIDNER: So, that - that was the reaction. But there was actually another video of us crying. A lot of folks started crying because we were all so stressed out.
But you know who the real MVP of the game was? Yes, Walter Clayton Jr. got the actual MVP of the game. But this guy, right here, Coy Wire, MVP. You know why? Because you got the most incredible interview with the coach. What did he tell you, quickly.
COY WIRE, CNN SPORTS ANCHOR: Yes. And we were able to walk coach off the court for the first time as national champion. Thirty-nine years old. Youngest coach in 42 years to get that title. And we will be talking about that in the next hour.
SIDNER: I love it.
WIRE: We'll get to see some of it coming up.
SIDNER: I love it.
Back to you. Go Gators!
BERMAN: Are you OK?
BOLDUAN: Of course she is. She's on cloud a million.
BERMAN: Are you OK?
BOLDUAN: She is on cloud a million.
Have fun, Sara. Now get on a plane and get home. BERMAN: There we go. Oh, there's the hat.
BOLDUAN: That is one big Gator hat.
BERMAN: All right, thank you all for joining us on the best day for Sara Sidner.
BOLDUAN: Oh, my God. Best day of Sidner's life.
BERMAN: This has been CNN NEWS CENTRAL. "SITUATION ROOM," up next.
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