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Trump Orders 90-day Pause on New Tariffs Except for China; Raises Tariff on Chinese Goods to 125 Percent After Beijing Hikes Its Tariffs. Aired 2-2:30p ET

Aired April 09, 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]

RICHARD QUEST, CNN BUSINESS EDITOR AT LARGE: The important thing here is that the worst tariff numbers on Japan 24 percent, North Korea 15 percent, the E.U. 20 percent, Mexico and Canada, those are now reduced. Go back to that statement that you just had, and you'll see that what he has now done is he's taken off the top level of tariffs, put China to one side. He's taken off the top level of tariffs and essentially created a new baseline tariff for everybody of 10 percent. That is the new U.S. tariff, 10 percent.

Now, just about all countries can live with that and they can all live with that without retaliating. So to some extent, that is already a major shift in U.S. trade policy. The new tariff for doing business with the United States is 10 percent, and now you've got 90 days to come back and tell us why you shouldn't go back to 40 percent, 25 percent, 15 percent, plenty of time. And there the devil is going to be in the detail because it's not going to be, as Peter Navarro says, it's not going to be about reducing your headline number. It's going to be about your non-tariff barriers, your restrictions, your procurement, your local content, your ownership rules.

Now, let's deal with China. It is really simple. Head to head, toe to toe. You did 25, we've done 25. You did 50, we've done 50. I'm at 125, let's see what China does tonight. This is just essentially until one side or the other blinks, you can write off bilateral trade between China and the U.S. for the foreseeable future because at these tariff levels, no one's buying.

BORIS SANCHEZ, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": So Richard, given the prognostications we've seen over the last few days about a recession within the year, do you think that this changes that equation?

QUEST: No. No, because China is a massive part of imports. The level of uncertainty remains very high. Just think about it, a week ago, we got this plan. We didn't get a plan that said, come to me in 90 days and you'll do it. We've got a plan. April the ninth is the deadline. April the ninth came, tariffs came in, and suddenly tariffs 90 days away. Who's to say it's going to change tomorrow or the next day or three weeks time?

Now, the underlying policy prescription hasn't altered. All that has happened is the capriciousness of the execution has become all the more clear. So a recession, highly, highly likely still.

BRIANNA KEILAR, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": OK, say more. Richard Quest, a recession still highly likely still, it's hard to sell this as a success if that's the case.

QUEST: Oh, well, the --

KEILAR: What would this look like?

QUEST: Well, I was listening very closely to Scott Bessent and to the press secretary. They are selling this as being you are witnessing the mastery of Donald Trump's art of the deal. He put maximum pressure, he took everybody over the cliff and then he pulled everybody back. And gosh, just look at these, 75 countries that are now gasping to negotiate. Well, that's fair enough. They are 75 countries because they're all gasping to negotiate, but they haven't come to fruition. They've got 90 days to do so. There's no evidence that they will reach non-tariff barriers, agreements.

And we've still now got a new sort of (inaudible) of 90 days out, takes us into the middle of the summer. So I just -- I know viewers are going to look and say, Quest just can't acknowledge what Trump has done. I acknowledge that he has taken us back to a stronger position in terms of, the damage is going to be delayed, but it's not taking us -- it's not restoring us to the status quo ante properly because the uncertainty remains and we've no idea what's in his mind next.

Oh, by the way, the U.S. Trade Representative -- sorry, one other thing. The U.S. Trade Representative, Jamieson Greer, the very man who's supposed to negotiate all this sort of stuff was on Capitol Hill and didn't even know that his boss was about to do it.

KEILAR: Yeah, he's still there. Let me read to you what happened. Democratic Congressman Steven Horsford of Arizona asked him. When asked, Jamieson Greer, the U.S. Trade Rep, when he was made aware of the pause, this was during the hearing. And just to be clear about, as you know, this would normally work, Richard, there would be some coordination. If you're at the White House and you know you are U.S. Trade Rep in the middle of a trade war is getting grilled on the hot seat before Congress, you'd button everything up. Right? That's not what happened. He was asked when he was made aware of the pause right after Trump announced it.

[14:05:00]

He said, "I understand the decision was made just a few minutes ago. It's been under discussion.

SANCHEZ: That's fascinating. Go ahead, Richard.

(CROSSTALK)

QUEST: I have to describe this rally by the way, if I had to put a title to this rally that you are seeing now, it is a relief rally because now, market participants, to use that phrase, they now have 90 days to square book, sort things out, work things out, decide how they want to go into the summer and beyond. It's a relief rally.

SANCHEZ: Let's go to CNN's Alayna Treene, who's at the White House because Alayna, you asked the question of Secretary Scott Bessent, that hits on the point that Brianna was just making with Jamieson Greer testifying on Capitol Hill. Greer apparently saying that this was something that was under discussion, but that it was decided in the last few minutes. You asked Bessent about what appears to be a reversal from the White House, and he denied that. He was arguing that this was Trump's plan all along.

ALAYNA TREENE, CNN REPORTER: Yeah, that's exactly right. I had an opportunity, he came out shortly after that announcement, and I'd note as well that Bessent was actually in the room with the president when he had sent out that post on Truth Social announcing this new, in my words, I called it a reversal essentially because, look, just less than 15 hours ago, we saw some of these new tariffs implemented.

And I posed that question to the treasury secretary saying, why the change now, especially if you consider that, just a couple days ago, the White House was not -- would not say that this was a negotiation. They said it isn't a negotiation and that these tariffs are meant to be really breaking the way that trade is done globally. But, Bessent responded by saying this was all by design by the president. He tried to argue that it didn't really have to do directly with the markets, though of course, his administration officials in this White House had been watching this market very closely, and he argued that this was the president's plan all along.

I'd also just want to mention as well that, yesterday, when I was in the White House press briefing room, I asked a question to Press Secretary Karoline Leavitt. I essentially asked her the same question. I said, now that the president has gotten the attention of world leaders, now that all of these different countries, 70 countries they said yesterday, were coming to negotiate these trade deals with the president, would he back off? Would he consider holding off the tariffs that went into effect this morning, or potentially putting a pause on them down the line? And she told me no. She said that she had just spoken, Leavitt, with the president and that he had said that these tariffs are going to go into effect and that they welcome these talks, but that he didn't have plans to change course.

Clearly, I mean, that was about 24 hours ago. Clearly, things have changed since then. And now, they're moving forward with this 90-day pause on reciprocal tariffs. Of course, not the same for China.

SANCHEZ: Alayna Treene, please stand by. I believe Matt Egan is with us. He's been tracking the response on Wall Street, and I think the numbers, Matt, speak for themselves.

MATT EGAN, CNN REPORTER: Yeah, Boris, this is just an epic sigh of relief in financial markets. See the Dow, surging 2,400, 6.5 percent. The Nasdaq skyrocketing, 10 percent. They're both on track for their best one-day performance since 2020. And look, the reaction on Wall Street was instantaneous. As soon as this news broke, we saw the stock market go straight up. We're seeing even bigger gains for some of the stocks that had been the biggest losers during the recent sell-off. Notably, Apple skyrocketing double-digit percentages. Tesla, I saw it up 16 percent a few moments ago.

Look, investors were getting really, really worried that if the president kept tariffs this high for this long, that it would just almost guaranty a recession. And people were starting to really price that in. They're worried about stagflation. There was a deep sense of fear on Wall Street. I just talked to Art Hogan, the veteran market strategist, and he said, look, the past five days, investors have been pricing in the worst-case scenarios.

I would just note, as Richard Quest pointed out earlier, we're not out of the woods, right? Not by any stretch. We're still talking about an incredible shock to the system in just the past few days in terms of this tariff announcement, the trillions of dollars that were erased from the stock market, the uncertainty and the hit to confidence that that delivered to CEOs, to small business owners, to consumers. There is going to be real economic damage from that.

In fact, RSM Chief Economist Joe Brusuelas, just a few moments ago, he told my colleague, Alicia Wallace, that despite this announcement from the president, he still thinks the U.S. economy is likely headed to recession. We don't know whether or not that's going to happen, of course. I think the good news and the reason why the market is responding is because some of the worst-case fears have been taken off the table for the moment.

[14:10:00]

But look, we still have a situation where the world's two biggest economies are in a full-blown trade war, waiting to see which nation is going to blink first. So, there's still a lot more risk ahead when it comes to the trade war, but for now, markets are breathing a sigh of relief.

KEILAR: Yeah, we're certainly seeing that. Matt Egan, thank you. And everyone stay with us. Joining us now is Republican Congressman Greg Murphy of North Carolina. He is on the House Ways and Means Committee, which is holding a hearing right now with the U.S. Trade Representative Jamieson Greer on the president's trade policies. So, all right, 90-day pause here, except for on China where tariffs go to 125 percent. Still a lot of tariffs in effect.

REP. GREG MURPHY, (R-NC) WAYS AND MEANS COMMITTEE: Yeah.

KEILAR: 10 percent across the board as well as a number of others when it comes to Canada and Mexico and so on. What did this achieve?

MURPHY: You know, Brianna, thank you. Richard, in his dramatic style failed to really elucidate to the American people why all this is being done. I presented a slide in Ways and Means just a couple of hours ago to show the absolute and terrible trade deficit that this nation is facing really since World War II. We've allowed other countries to rebuild themselves at the expense of the American economy. The American economy has essentially turned into a service and government economy, not a manufacturing economy.

So, these things need to be done. It doesn't make great news to talk about all the other tariffs that previously were raised against the United States. So what President Trump is, he's trying to just level and have fair trade between companies, allow us to open up our markets, our goods and services to other countries. So yes, it makes for good news. And when you're dramatic, like Richard was, it's helpful for news programs. But in the end, we're talking about national security and the national economy, and this is the way really to get nations to stand up and say, yes, we've abused your privilege of taking in your goods or not taking in your goods. And we see now 75 countries have turned around and said, OK, we're willing to come back and look at what we've been doing wrong.

KEILAR: I think Richard is being a pretty straight shooter about some of his assessments here. China obviously, which, huge trading partner, second biggest economy in the world.

MURPHY: Yeah.

KEILAR: 125 percent tariffs, this is where Americans get a lot of their goods from.

MURPHY: Yeah.

KEILAR: This is still going to have a tremendous impact. And you are hearing time and again from our folks here, they're talking to people who are assessing, there could still be a recession even as things are as they are now. So what -- again, I ask you, what did this achieve?

MURPHY: Well, think about if people look at what China is trying to do, try to achieve a worldwide policy, a China one policy. The president really only has two options to try to defeat this. One is economically through tariffs or some other means, and two is militarily, which we don't want to do. And so, looking at the health and strength of the nation, yeah, we are a patient as a country. We're a patient that doesn't know how sick we are, and we don't want to take the medicine that is needed.

It is tough at this time, no doubt. But if we're talking about national security, not only in the short term, but in the long term, we have to do something to keep us out of the calamitous fall that we're doing right now into a debacle with our debt and as well as with our trade. We have to do these things to bring other countries that are not treating us well to the table.

KEILAR: And what about the ones that are treating us well? Why treat them like this to get to this point?

MURPHY: People said that about Mexico and China. They're our friends. They are our friends. Europe is our friend.

KEILAR: What about Australia, who the U.S. has a trade surplus with?

MURPHY: Well, I mean, these are all people. There will be obviously some collateral damage in one way or the other, but you can't pick and choose. You have to have an international policy. And this is what the president is doing. I know a lot of people who may not like his method. KEILAR: Why can't -- he's picking and choosing. By definition, he's picking and choosing today. He was picking and choosing with how --

MURPHY: Well, the great thing is --

KEILAR: -- he decided different countries would get different tariffs.

MURPHY: Yeah.

KEILAR: He's picking and choosing today by giving a reprieve to countries except for China.

MURPHY: Yeah, he sure is. Because those are the countries that are coming back and saying you are right.

KEILAR: But you said, you can't pick and choose.

MURPHY: Well, no, no, no. No, I didn't say that. I said you have to come back. But these are pick and choose because these are the countries that said, Hey, you're right. We are doing this wrong. We want to come back to the table and have fair trade. Look, if you have to see what the results short term really, and we've only been a week of what's happened with the trade issues. This is called good acting. It's forcing countries that we have helped to act well in the interest of America. We have to get back on track.

The last four years, the Biden administration did absolutely nothing, nothing on trade. And the president has come in, this is one of his campaign promises. You're going to work on American trade and get America first, and get American economy structurally sound again. And that's what he's doing.

KEILAR: I do want to ask you because as you know, American small business owners, farmers, the markets, they're all interested in knowing that this is --

MURPHY: Sure.

KEILAR: -- something that is well thought out because the ramifications here are huge.

[14:15:00]

MURPHY: Sure.

KEILAR: And in this hearing, which you were a part of, and I'm not sure if you were there for this moment, but the U.S. Trade Representative, after the treasury secretary insisted this was the plan all along to do it this way, the trade secretary was asked, when he was made aware of this pause and he said the decision was made just a few minutes ago.

MURPHY: Sure. Well, Brianna, when you're playing poker, you don't show your hands before. You don't tell them what you're going to do. That's not just a smart game. KEILAR: This was after the hand was played. This was after he said --

MURPHY: No, no, the hand was not played yet.

KEILAR: The decision was made just a few minutes ago.

MURPHY: Right.

KEILAR: It's been under discussion.

MURPHY: It's been under discussion.

KEILAR: This was after Trump announced.

MURPHY: Well, Brianna, if you let me talk, the discussion was going on with the trade minister, but the ultimate decision is the president and playing poker with the rest of the world so that we can win. American heck (ph) can have a structurally sound economy is what the goal is. Yeah, the president makes the final decision. Greer -- Ambassador Greer was in the room and I'm sure with all the other individuals, discussing this issue and what the -- when the president pulls the string, he pulls it. And the ambassador was in the Ways and Means meeting with us. So it's really not something he could step out and do.

KEILAR: So was he out of the loop? How do you -- how do you make -- how do you square what he was saying?

MURPHY: Well, no, I mean, the president made the decision. Discussions had been occurring previously, but again, it's ultimately up to the president. This -- the ambassador was with us for many, many hours today. So he's not really able to be in the room for the final decision because President Trump made it when he made it.

KEILAR: OK. I will just say Bessent said that this was the plan all along.

MURPHY: Sure.

KEILAR: So, we're just seeing obviously some daylight between what was being said here.

MURPHY: Well, again, you are playing poker.

KEILAR: You're hearing --

MURPHY: You're playing poker and you don't show your hands. You want to reward good behavior. That's part of what we do.

KEILAR: Well, I think --

MURPHY: So having countries come back and say they want to help us is great.

KEILAR: I think there are companies worried that perhaps it's more a game of Go Fish, right? And that's really the concern right now. MURPHY: Sure.

KEILAR: So we're hearing from business owners, including a comic book store owner in your district told a local ABC station, he's concerned over price hikes by publishers because most single-issue comics are printed in Canada.

MURPHY: Sure.

KEILAR: There's still this 10 percent across the board tariff, right? There's still a number of tariffs on Canada and Mexico.

MURPHY: Yeah.

KEILAR: There's the auto tariffs. GM of Greenville Auto World also worried about difficulties obtaining car parts. That's not going away.

MURPHY: Yeah.

KEILAR: So what do you say? What do you say to those people?

MURPHY: Well, I say to those people, Brianna, just kind of what I said before, we are in a difficult situation as a nation. Do you want to feel better just in this moment or do you want this country to survive? Do you want it to have national security, economic stability, and a good structural competency? This is what the president is trying to get at. Yes, I've never been one to say there's not going to be individual discomfort, pain, or possible loss, but we're talking about the nation security.

If you could see a slide into really what we are doing as far as a nation being able to manufacture our own goods, look at what we're doing. Pharmaceuticals with China, good Lord, we are so dependent. This is something that we saw during the pandemic. We are so dependent upon pharmaceuticals from China, the health and welfare of our country. We have to come back. We have to nearshore; we have to onshore to countries that don't want to see our demise.

Yes, Mexico is our border, Canada is our border, but they've also had unfair trade practices against the United States. So look, we're just literally trying to level the playing field and have fair trade.

KEILAR: Well, I do appreciate that you are saying to people, including your constituents, they may hurt from this in the near term.

MURPHY: Sure.

KEILAR: Because that certainly is a reality.

MURPHY: Sure.

KEILAR: And some folks don't say that. Congressman Greg Murphy, thank you so much.

MURPHY: Thank you, Brianna. Have a good day.

KEILAR: You too.

SANCHEZ: So we're continuing to follow the breaking news to CNN. You see the Dow Jones Industrial average, significant, enormous gains there, not just in the Dow, but also across markets. We have been following the fact that President Trump just announced a 90-day pause on some of his new tariffs. The pause, though, will not apply to China. Trump actually says that he's raising his tariffs, his retaliatory tariffs on China up to 125 percent.

KEILAR: Back with us now is Former Treasury Secretary, Larry Summers. Markets are responding well to this stay of execution, but it is a 90- day pause, Larry. And I wonder how you're seeing this moment.

LAWRENCE SUMMERS, ECONOMIST AND FORMER TREASURY SECRETARY: Look, bullies back down when there's a big pressure. Markets were collapsing. It was a really scary situation. There wasn't any real viable alternative and so, the president and the administration have saved face as best they could by backing off. They tried to wrap it up in the fact that lots of countries had called and wanted to negotiate.

[14:20:00]

The problem with that argument is that they were crowing from Friday on about all the countries that were calling wanting to negotiate, but they didn't take any step to back off the tariffs. The reason they took the step this morning is because of the damage they were doing to the country's credit worthiness. And they did the right -- they did a useful step, but make no mistake, it was a u-turn in response to market pressure. And also make no mistake that this preserves about half the maximum tariffs that they were talking about between the 10 percent, the China, and the continuing tariffs on auto and steel.

So this is still five to 10 times as large a tariff increase as the president imposed during his first term, still takes us back to Smoot- Hawley, still will cost American families thousands of dollars and is still a dangerous and problematic step.

SANCHEZ: Specifically, what do you make of the approach to China, Larry?

SUMMERS: I think that it's a very dangerous game of chicken. And it may well be that it hurts China. It may even be that it hurts China more than it hurts us, but I think it's very unlikely to cause Americans to live more economically secure lives, or be more prosperous. There are right and wrong ways to be firm with China, and I relate very well to the instinct that we need to be firm with China across a whole range of issues. But to have begun by bludgeoning all our traditional allies was exactly the wrong way to gain leverage with China. And I'd be very surprised if this strategy proves ultimately to have been an availing one.

Yes, we did have to pursue a firm new strategy with China, but this kind of bluster, threats, alienation of allies is not close to having been the right strategy.

KEILAR: Explain that. Explain how other countries, allies of America, including those who still faced a 10 percent tariff despite the fact that the U.S. has a trade surplus with them, explain how what has happened now, even with this reprieve, may factor into their considerations when it comes to trade, when it comes even to other kinds of agreements with the U.S.

SUMMERS: They're not going to trust us. They're going to be more nervous about holding our financial assets. That's why interest rates are still substantially up. They're not going to be joining with us to pressure China with the whole force of the international community when we are also in an extra legal way, putting tariffs on them. They're going to see a huge commercial opportunity because China is going to respond to this by buying European rather than buying American, by buying from its local neighbors rather than buying American.

So they're going to see a huge commercial opportunity at our expense, which they're going to feel entirely justified in taking, given what we have done to them. So, I think this was a completely misguided strategy if the objective was to redefine the economic relationship with China. Look, it is a traditional basic tenet of bargaining that you try to bring your allies together and you try to split your adversaries apart. And what we are doing is alienating our allies and uniting our adversaries.

[14:25:00]

And that seems to me to be a very poor strategy for us succeeding. I think it's a poorer and more dangerous world for the steps that the president is taking. And so, yes, we should be -- certainly be glad that there is this pause. But we should also learn what the fluctuations in the market have been teaching for the last four days, which is these are seen as incredibly dangerous, toxic policies that impose costs of trillions of dollars.

The more of them we are doing, the larger the costs. The more of a sense that we might back off, the smaller the costs. The market rally is because markets see through rhetoric and they recognize reversal of mistakes. And what we had today was a partial reversal of an egregious mistake.

KEILAR: Former Treasury Secretary, Lawrence Summers. Larry, thanks so much for being with us.

SUMMERS: Thank you.

KEILAR: And stay with us. We're going to get in a quick break here. We have much more ahead on our breaking news, a 90-day pause on new tariffs for all nations except for China. There's still a 10 percent across the board tariff, as well as a number of other specific tariffs that stay in effect. But those massive so-called reciprocal tariffs, they have been largely paused here. We'll have more just ahead.

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