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Trump Orders 90-Day Pause On New Tariffs Except For China; Trump's Tariff Pause Has 401(K)s Trending Up Amid Market Uncertainty; Markets Skyrocket As Trump Hits 90-day Pause On Most New Tariffs; Businesses In Limbo As Trump Shifts Trade Policy Again. Aired 2:30-3p ET

Aired April 09, 2025 - 14:30   ET

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

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[14:31:35]

BRIANNA KEILAR, CNN HOST: So if you're just joining us, a major turn in the Trump trade war. The president has announced a pause of 90-days on those so-called reciprocal tariffs that went into effect at 12:01 this morning.

There is a big exception, the biggest exception, and that is China.

BORIS SANCHEZ, CNN HOST: Yes. The president increasing the tariffs on China to 125 percent. This, after China announced its own retaliatory tariffs.

CNN OUTFRONT anchor, Erin Burnett, is with us now on the phone.

Erin, what do you make of this move by the White House?

ERIN BURNETT, CNN ANCHOR, "OUTFRONT" & CHIEF BUSINESS & ECONOMICS CORRESPONDENT (via telephone): I mean, I'll just start off by saying, I mean, obviously, the markets we're stunned in a sense. I mean, if you look at the -- the back and forth -- and investors speak to Paul Hickey from Bespoke Investment, Boris.

He just said, you've got a whiplash here with the NASDAQ. If it finishes where it is now, it will be one of only six days in history that it ended up this much in a single day, just on a percentage basis, right? So the whiplash here truly incredible.

But I think the other way of looking at it -- and listening to your prior guests, this is also clear. When you tell people you're going to drop a nuclear bomb on them and wipe them out, and suddenly you say, oh, guess what? I'm just going to drop a bunch of really big bombs, it won't be quite as deadly, then there's a sigh of relief.

But I think that analogy sort of holds here, because, yes, they're pulling back, but they're still imposing tariffs around the world, some of the highest in history.

It -- obviously, the bond market collapsing is partially why they are caving in here. What's happening with China is -- is crucial that that relationship is

-- is the most important for the United States. And that situation obviously is now front and center.

But -- but I think it's important to realize you still have massive tariffs here. That is still going to affect consumers and profits and income. And this unbelievable uncertainty.

But -- but I'll just finish by saying, Boris, Delta Airlines today came out withdrew all of their guidance for how things we're going to do. Said they're not going to add the new seats they we're going to add. And that growth had stalled.

That's what had happened. Literally, the nuclear bomb had been dropped. So the question is, how much can you recover when it's just a bunch of conventional warheads?

KEILAR: Yes. No. That's right. And also, we're hearing from small businesses that had already aborted some plans that they had a small window in which to make.

We heard the White House officials there, the press secretary and the treasury secretary spinning this, Erin, as a positive, saying they goaded China into a bad place.

What do you think of that spin that they're doing?

BURNETT: You know, when investors are saying, look, they may be bumbling, but at least they have a pain threshold. You know, the reality of this was that markets were collapsing. That's what the word Larry Summers just used, right? In his conversation with both of you.

But it isn't just that. It's -- its the bond market, right? It's the bond market. They we're seeing incredible pressure on U.S. treasuries, mortgage rates for people. And that pain was simply too much to bear.

It ended up in leading to doing directionally the right thing. But to say that this is part of the plan overall, obviously that doesn't add up.

I mean, you consider the fact, you know, I was speaking to the -- one of the researchers, the economist, that they that they had cited in their whole equation, as you all know, of how they came up with those massive truly mind numbing and bizarre tariff numbers. A

And -- and the truth is, no one even knew where they came up with those numbers. So to say that there was all some sort of grand plan and we're playing chess here doesn't add up with the facts at hand.

[14:35:05]

SANCHEZ: Do you think this move gives investors any confidence that the threat of a recession has lessened?

BURNETT: That's a good question, Boris. We'll have to see when they start running the analysis. Again, back to Delta, it's almost impossible for companies to really forecast what things are going to look like when you don't know what prices are going to be. And therefore you don't know what demand is going to be.

But, you know, even with that, it's not as if they suddenly said, we're just not going to do this. You still have across-the-board tariffs of 10 percent, including, unless they come out with more adjustments on countries with -- with which the United States has a trade surplus, on countries that don't have tariffs on the United States at all.

I'm talking about the U.K. and Switzerland and Australia. Right? That is all still in place. And a 10 percent across-the-board of course, would still be historic highs.

The average tariff before these announcements from the U.S. was about 2.5 percent. So, OK, you're not going up to 20. You're going to 10? You know we'll have to see where these numbers shake out.

But -- but -- but those are still very real hits. And we'll have to see what that does to adjustments, on whether JPMorgan changes their likelihood of a recession. Absolutely, that could happen.

But it's not as if suddenly all this has gone away. And certainly acting in a way where you were going to drop a nuclear bomb and then you're dropping conventional warheads, doesn't engender confidence in your behavior and your thinking.

And that's also a negative in a market and an economy that thrives on certainty.

KEILAR: Yes. And Bessant stretched that -- stressed that as he was speaking outside the White House a short time ago, Erin. He said, "No one creates leverage for himself like President Trump."

I guess my question for you is, what did the president achieve here? Did he create leverage for himself, as you see it?

BURNETT: I mean, you look at the way he rolled out that -- those charts with the -- with the numbers of tariffs. There isn't anybody who has more confidence in this administration and how they came about that now than they did before. Right? That's a reality.

The question is, how much of that can be undone? Can you build back respect, goodwill and strong relationships? And that's really important.

And when it comes, Brianna, down the most important thing, which is, you know, the U.S. is trying to solve for very significant imbalances that exist that we all know about. Right? Too much debt, too much reliance on cheap goods from foreign countries, particularly China. Those are realities that they're trying to deal with.

But you look at the U.S. debt, who buys that debt. Outside of Americans, that's bought by actually Japan first and then China? So China has incredible leverage in that regard.

And it is clear they're going to use that. And that's -- that's really what this comes down to.

SANCHEZ: Yes. Really fascinating perspective.

Erin Burnett, thank you so much.

You can watch "ERIN BURNETT OUTFRONT" tonight at 7:00 p.m. Eastern right here on CNN.

We have more on our breaking news after a quick break. Stay with us.

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[14:42:47]

SANCHEZ: If you've taken a brave step over the last few days of actually looking at your 401(K), you may have endured some strain. And now, given today's news, it could be trending up.

But this back and forth have left many scrambling, wondering what they should be doing or not doing in a time where markets are volatile.

Let's discuss with "The Money Coach," Lynnette Khalfani-Cox, who joins us live.

Lynnette, thank you so much for being with us.

What do you think this 90-day pause on some tariffs and an increase for China and the stock market rallying around it, what does this mean for peoples pocketbooks?

LYNNETTE KHALFANI-COX, "THE MONEY COACH": Well, I think overall it presents a bit of a mixed case scenario for most investors who are also, of course, savers, home buyers or homeowners, as well as people who have to buy goods and services of all kinds.

So first, if you're just an investor and you're just purely worried about what the stock market is doing, clearly investors are cheering the 90-day pause.

We saw the Dow come barreling back, you know, 2,500 plus points or so. We saw the NASDAQ up. All major market indices are up on this pause in the tariffs, or at least a pause to the 10 percent level, with the exception of China.

But overall, markets don't like uncertainty. And so even though we have this, you know, bit of a reprieve, A, the tariffs are still remarkably higher than they had previously been for most countries.

And then, B, there's this huge open question about what happens with China. Because of course, Trump has now increased the tariff to China to 125 percent.

And let's not forget, China has some major leverage. They own a lot of U.S. treasuries. And so if they really wanted to amp it up further, they might just start dumping some of those securities. What happens if they do? That means mortgage rates here in the U.S. would start to rise.

Now you take another big hit to the housing market, which, you know, we know so many people have affordability questions and worries already. So we have to wait and see how all of this plays out.

[14:45:09]

Again, of course, it's good short term for the portfolio to get some juicing up, but this is one of the reasons that, you know, we typically tell investors, when you have these kinds of shocks, don't be rash to just, you know, panic sell because things like this can move on a dime.

SANCHEZ: So what you would suggest to folks is to not look at their 401(K)s, to not move money right now, or should they consider parking their money in something like bonds?

KHALFANI-COX: Well, I'll tell you, I'm actually coming to you live from Kigali, Rwanda, and my husband and I have been traveling and we have not looked at our 401() statement.

I knew it was going to be brutal. We're more aggressive investors and we have a higher risk appetite and still have a long-term orientation and a long-term outlook.

So I actually did practice what I preached here. Because a lot of this will just cause you unnecessary anxiety.

And so I know that whatever hit my portfolio took from last Thursday, Friday, Monday and Tuesday, it still has not come back altogether because we saw markets off in general, 12 percent to 14 percent or 15 percent.

And so this big move today is recouping some of those losses. But it's definitely not in its entirety.

And then, of course, in terms of what to do kind of going forward, my advice in general to people is that if you find that all of this whipsaw action in the stock market just really allows you to just stress out and you -- you can't get sleep at night and you're anxious about it, that's probably telling you that you do need to make a change.

But it doesn't mean you just need to sell, sell, sell and get out of the stock market entirely. You probably need to tweak or adjust your asset allocation. And that's just a fancy little Wall Street way of saying the mix of investments that you're holding.

So maybe you have too much exposure to stocks in terms of your own personal risk appetite. And maybe bonds would be better as a way to balance out some of the volatility.

We saw this sort of, you know, move towards treasuries. We saw, you know, getting to a 4.4 or so in terms of yields on the 10-year.

But then there are other things that people can buy in terms of fixed- income securities, whether that's municipal bonds, whether that's high-grade corporate bonds or even things like TIPS, Treasury Inflation-Protected securities.

So, yes, I do think people should look at their overall asset allocation and determine if it's a comfortable mix for them, A, to allow themselves to sleep, but also a mix of investments that is, you know, in alignment with their goals, like over what time frame they'll actually need the money.

SANCHEZ: Yes, a lot to consider.

Lynnette Khalfani-Cox, appreciate you. Thanks for joining us.

KHALFANI-COX: My pleasure.

SANCHEZ: We're going to continue following this major breaking news. President Trump pausing most new tariffs for 90-days. The stock market, responding with enormous gains as a result. Much more on that straight ahead.

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[14:52:41]

KEILAR: For small businesses that rely on goods and components produced in China, these 125 percent tariffs could have a potentially devastating impact.

While giant companies like Apple can look for alternative manufacturing bases, small businesses in the U.S. are left scrambling with how to respond in the face of uncertainty.

Joining us now is Sarah Wells. She's the founder and CEO of Sarah Wells Bags. It's a 13-year-old small business that designs handbags and clothes for new moms.

Sarah, thank you so much for being with us.

And this is really important, I think, to explain -- we booked you before the pause, but you can explain to us how this 90-day pause is going to affect you.

You had been sourcing all of your stuff out of China. Once these tariffs went into place, what did you do?

SARAH WELLS, FOUNDER & CEO, SARAH WELLS BAGS: Absolutely. So I think really a pause is better than no pause. But the uncertainty is still really chaotic for a small business like me.

So my last shipment out of China, actually I had committed to that order as it was coming over here to the United States, that early 20 percent was put on it. And I had to scramble and come up with the cash pulling from my hiring funds and so forth to make that good and get my goods out of the port.

And now, even if I move out of China, how am I going to be certain that if I place an order today, I won't find a new tariff tomorrow? This up and down is just something that, as a small business, I can't pivot to.

KEILAR: So you tried though to pivot to Cambodia and then they were slapped with a tariff. And so how did you react to that?

WELLS: Absolutely. So I actually had placed an order after visiting Cambodia myself and had to cancel that order because the 50 -- 49 percent-plus base tariff was unsustainable out of Cambodia as well.

So here I've been sitting, canceling my orders right and left. This is creating a gap in my inventory. The holiday season is going to be upon us. This is going to impact my ability to make sales and retain my U.S. workers.

And I'm still really scared to place an order, even with Cambodia or anywhere outside of China at this point, because I just am worried if I commit to an order, how do I know this tariff policy isn't going to change again tomorrow?

KEILAR: OK, so show us one of the bags that you make. This is -- I mean, this is like a lovely bag. If you're a new mom, this carries all your stuff that you need, right?

So I think a person might look at this bag and say, well, why don't you just make this in the U.S.? Explain -- explain to us why you cannot make this bag in the U.S.

WELLS: I would love to make this bag in the U.S., but I have looked and there is no handbag manufacturing in the United States at scale.

[14:55:06]

I looked 13 years ago. I looked in 2017 when the Section 301 tariffs came about. I checked again in the last three months. It just doesn't exist in mass production.

And even if there was a factory that came about that could do final product assembly, you'd still have to import raw materials from 14 other global suppliers, and they would all have the -- the China tariffs on them.

KEILAR: OK, so you'd still be paying for the individual components?

WELLS: Absolutely.

KEILAR: So talk about the employees that you employ and how long you can keep them there with this uncertainty before you have to perhaps cut hours do layoffs. What are you looking at?

WELLS: Absolutely. So I lead an all U.S. team. Some of them are military spouses that rely on my organizations flexibility as they move to military bases. And many of them have been there six, seven, eight, nine years.

And I am really concerned about my ability to retain my American workforce, particularly if I have to sock away money out of fear that I won't be able to get my goods out of port someday if the tariff policy changes again.

KEILAR: So, I mean, how has this been for you just as a business owner? Sort of the -- the disorganization, you know, just the chaos? Emotionally, how has it been for you, for your workers?

Because you have this success story, this business that's been working for you and for people who are there for 13 years? That's pretty great. And now what does this mean?

WELLS: Yes, this was my American dream, right? So I was the little girl with the lemonade stand that wanted to invent something and be successful with my own solution to a problem.

And 13 years ago, I came up with it for the new mom community. And I've created an incredible brand. And this has just been utterly devastating.

You know, I've already not been able to fill roles that I need to fill in order to make the sales, to keep my business going.

It's chaotic. It's uncertain. It's unpredictable. It's putting stress on myself and my team and my family, and certainly the new mom community, who are worried they won't be able to get the products that they need as new parents.

I think it's really been feeling -- a feeling of abandonment by the U.S. government as a small business, which I think is so core to everything that we believe in in this country.

KEILAR: And as you're moving into the holidays, as you said, which is a big time for purchasing of your products, when do things need to be settled so that you could actually have the certainty?

Because this is -- it's clear this isn't providing it this 90-day pause. What -- when do you actually need that certainty of everything's kind of figured out?

WELLS: Honestly, a month ago. I mean, we're already past that point. We are going to see gaps. We are going to see products with shortages. We are going to see products with significantly higher raised prices.

We are already going to see, in the next couple of weeks here, small businesses that have to close, even with this pause. This pause is uncertainty. The damage has already been done. We've already lost a chance to bring in inventory.

I'm a firm believer this is going to really make an erratic supply chain, as everyone now scrambles to figure out where they're going to manufacture and how to get it over here. This is a really dire situation. KEILAR: Sarah Wells, thank you so much for coming in and for telling

us about your situation. It really does illuminate what small business owners are dealing with.

WELLS: Thank you. Thank you.

KEILAR: And coming up, some more on this major turn in the Trump trade war. The president has announced a pause of 90-days on the reciprocal tariffs that went into effect at 12:01 this morning. With one big exception, that being China. Stay with us.

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