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Stocks Surge as Trump Signals Possible U-turn on China Tariffs; Trump Softens Tone on Powell After Warnings From Advisers; Elon Musk Says He'll Reduce Time at Doge as Tesla Profits Plunge; Pope Francis' Body Lies in State for Public Viewing; Cardinals Begin Preparing for Conclave to Elect Next Pope; Trump Slams Zelenskyy for Inflammatory Comments on U.S. Proposal. Aired 2-2:30p ET
Aired April 23, 2025 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[14:02:38]
BRIANNA KEILAR, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": The trade war potentially tapers off. President Trump softening his stance on China tariffs, signaling a potential de-escalation in the trade war. The move is encouraging to investors with markets rallying in response.
BORIS SANCHEZ, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": Plus, going back to his day job. Elon Musk tells exasperated investors he could soon return to Tesla and back away from his work at DOGE. Will that be enough to help restart earnings at his company? And paying their respects, mourners packing St. Peter's Basilica where the body of Pope Francis will lie in state for three days as the Vatican faces its first complication with the conclave that will decide the next Pope. You're watching "CNN News Central." All breaking news coming in right now. Don't go anywhere.
KEILAR: Happening now, stocks taking a liking to President Trump's potential u-turn on China, signaling tariffs on China will "Come down substantially." And earlier today said this --
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DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES OF AMERICA: Going to have a fair deal with China. It's going to be fair.
UNIDENTIFIED MALE: Are you talking to them actively now?
TRUMP: Actively? Everything's active. Everybody wants to be a part of what we're doing.
(END VIDEO CLIP)
KEILAR: To be clear, no move has been made. The steep tariffs, they are still in effect, but it's notable that Trump is now at the very least, publicly talking about potentially slashing them dramatically. And this is happening as CNN is learning the nation's top CEOs just dialed up the pressure. CNN's Jeff Zeleny is standing by live for us at the White House. Jeff, what have you learned? JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well, Brianna, we do know that all of these topics that you just mentioned are linked. Yes, the markets are reacting favorably to what the White House is softening its tone a bit on China. Certainly softening its tone on the future of the Federal Reserve Chairman Jerome Powell, who just last week the president said out loud that he would like to dismiss him.
The markets are reacting strongly to this. The question is what changes will come in this ongoing trade war with China? But the president stepped out of the White House earlier this morning, and he said this about his longstanding view on tariffs.
[14:05:00]
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TRUMP: We're going to make a lot of money for our people. We'll be able to lower taxes substantially, and we're going to be proud of ourselves. We're not going to be a laughing stock that was taken advantage of by virtually every country in the world.
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ZELENY: Well, that remains very much an open question. But the reality here is that there is certainly a sentiment underway that the -- some of these trade deals that have been held up in a back and forth, certainly with the U.S. and China, the administration is a signaling its willingness. Some are calling that blinking by the administration. The president is not saying that. But there's no doubt, Brianna, the markets are responding very favorably to what they're seeing today from this White House. Brianna?
KEILAR: They certainly are. Jeff Zeleny, thank you. And again, keep in mind through all of this, tariffs on more than 190 countries are still in place and the White House has not announced a single deal yet. In fact, one of the officials leading trade talks just warned it could take years to fully rebalance trade with China. CNN's Matt Egan is with us now. Matt, what's the latest?
MATT EGAN, CNN REPORTER: Well, as you noted, markets are relieved that the White House is taking a softer tone here, right? First on Jerome Powell, the fact that the president says that he has no intention of firing the Chairman of the Federal Reserve. That is good news for investors because that would've been truly a nightmare for markets. But, also these new comments on the trade war, I mean, the big fear for investors was that the world's two biggest economies would be stuck in this doom loop where tariffs go higher and higher.
So the fact that the White House is talking about lower tariffs is encouraging. The president did say that there are these active talks, and the Treasury Secretary Scott Bessent, he said that he thinks there is a huge opportunity for a deal, but Bessent also signaled that this is not going to happen overnight.
He told reporters today that it could take two to three years to fully rebalance trade with China. That is a considerable amount of time where we could face prolonged uncertainty. So, that is another important reminder that this trade war, it is not going away overnight, right? These tariffs do remain in place, and there's been a significant amount of damage from this trade shock of just the past few months.
I mean, of course, the market damage, even though stocks have rebounded in recent days, the S&P 500 has had more than $7 trillion in value wiped out, $7 trillion and that's just since record highs about two months ago. It's pretty staggering when you think about it. There's also been damage to the economy when you think about how much confidence has been shaken, confidence among investors, but also CEOs, small business owners, and perhaps most importantly, consumer confidence.
I mean, that is a chart showing consumer sentiment. We learned earlier this month that consumer sentiment plunged to the second lowest level on record, going back to the 1950s, and that confidence is not going to return overnight. We don't really know what the confidence shock is going to do to the real economy when it comes to consumer spending.
I think that is one reason why some economists that I talk to, they remain very concerned here, Brianna, about the economy, given all of the changes that have gone on. I talked to Justin Wolfers, University of Michigan economist. He told me that he remains extremely concerned about the economy because uncertainty remains through the roof.
KEILAR: Yeah, those plunges often end up being recessions as we see on that chart. Matt Egan, thank you very much. Boris?
SANCHEZ: Among the stocks in green today, Tesla, despite reporting a whopping 71 percent plunge in net income yesterday because of falling sales around the globe, analysts lay much of the blame for the drop on the cost slashing work done by its CEO Elon Musk at DOGE. During an earnings call yesterday, Musk told investors that he plans to pull back on his time at the government department.
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ELON MUSK, SENIOR ADVISOR TO THE PRESIDENT OF THE UNITED STATES: Starting probably in next month, May, my time allocation to DOGE will drop significantly. I think I'll continue to spend a day or two per week on government matters for as long as the president would like me to do so, and as long as it is useful.
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SANCHEZ: As Musk apparently backs away, we should point out, he recently said that DOGE was going to save $150 billion in fiscal year 2026, far short of the $1 trillion he previously vowed to cut. Joining us now is Tesla investor, Ross Gerber. He's the Co-Founder, President and CEO of Gerber Kawasaki Wealth Management.
[14:10:00]
Thank you so much for being with us, Ross. I wonder how much you think Musk refocusing on Tesla will impact day-to-day operations and decision making there.
ROSS GERBER, CO-FOUNDER, PRESIDENT AND CEO, GERBER KAWASAKI WEALTH MANAGEMENT: I mean, I think this whole idea that he's coming back to Tesla is somewhat overblown in that people forget that he's raising money for xAI. I'm also an investor in xAI, and I can tell you, his real focus is on AI and they're looking at raising a huge amount of money. So, I don't necessarily think refocusing on Tesla is his main goal. It's one of the things he will do along with building xAI. So, I still think the same problems persist irrelevant of where he spends his time.
SANCHEZ: Do you think that a large part of the issue has to do with the reputational damage that Tesla has taken because of his controversial work with DOGE? In other words, even if he goes back to the company, it doesn't totally repair their reputation.
GERBER: Right. Exactly the problem. So it might help repair the fact that their critical software doesn't quite work yet and is supposed to be launching a taxi service in two months, so that it helps. But where it hurts is the fact that he has created a huge amount of brand damage. And I think there's a misperception that Elon has that, he thinks that his actions within the government have created this brand damage, and that's not correct.
It's actually a combination of things led by his actual views about many people and topics that are abhorrent to many people, including the support of the AfD in Germany and other right-wing white supremacist groups. So, I don't think that DOGE is the issue actually. It's that people despise Elon Musk even more than they hate Trump, and that's not something that he can solve at this point.
SANCHEZ: That's really fascinating. I wonder whether you have any clarity on how Trump's auto tariffs may have been affecting Tesla.
GERBER: Well, I do, and Tesla, fortunately because they manufacture in three continents, has less impact than other car companies. But it certainly has a pretty big impact because a lot of critical battery materials are made in China. And Tesla's biggest market is actually in China in a lot of ways. So, if Chinese consumers pull back from American brands like Tesla in retaliation, that could also be devastating to Tesla.
So, Tesla in a lot of ways could end up being a pawn in this trade war that China hasn't pulled out yet, but certainly could be the next thing they pull because this perception that we have some sort of great leverage over China is much more of a perception than a reality.
SANCHEZ: That's really interesting. I do want to get your thoughts on today, Treasury Secretary Scott Bessent at the Institute of International Finance saying that China needs to change to rebalance its economy away from depending on exports. I wonder if you think Xi Jinping sees it that way.
GERBER: No, they don't. One thing I know is nobody in this administration has read anything about Chinese history or culture because they just don't get China at all. The Chinese have had a 5,000-year history of not wanting the West involved with their economics. In fact, they've worked very hard for so long, going back to the British Empire Days, to not have Western intervention in their economy and in their culture.
And so, they'll wait any amount of time and go through any amount of suffering before they'll let the West affect this culture and history of theirs. So, I don't think Trump realizes that what pain China is willing to go through, that Americans are definitely not willing to go through. And that's why I said that I don't think we have the leverage that we think we have because nobody in America wants to go through a recession, nobody wants to go through hard times, and Trump has put us on this path now and nobody is happy about it.
Consumer confidence is at all-time lows because of it, and China knows this. So, they just wait until the recession hits the United States and then America's tune will change. Where for them, they don't care.
SANCHEZ: Ross Gerber, fascinating perspective as always. Appreciate you joining us.
GERBER: Thanks for having me.
SANCHEZ: Still to come, as mourners pay their respects to Pope Francis, Cardinals are preparing to battle over the future direction of the Catholic Church. We'll take you live to Rome ahead of the papal conclave. Plus, Vice President J.D. Vance threatening to abandon Ukraine unless they agree to a peace deal with Russia, the key concession the White House now wants to extract. And later the Trump administration is accused of setting a trap after a Palestinian student leader is arrested (inaudible) his final interview for U.S. citizenship.
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That and much more coming your way on "CNN News Central."
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KEILAR: Live pictures as thousands of mourners pour into St. Peter's Basilica and pay their final respects to Pope Francis. He will lie in state there for three days until his funeral this Saturday. Francis will be the first Pope laid to rest outside the Vatican in more than a century. And as Cardinals arrive in Rome for this week's services, they're also looking ahead to the process of selecting the next Pope.
[14:20:00]
Discussions and speculation over who that person should be are already in full swing. CNN's Senior International Correspondent, Ben Wedeman is joining us now from Rome with a closer look at some of the potential candidates. You're there outside of St. Peter's Basilica, Ben. Let's take a look.
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, we're outside the Basilica where we have seen throughout the day, tens of thousands of people coming to pay their final respects to Pope Francis. In fact, the Vatican had decided to keep it open until midnight for people to come in, but they're now extending it, they say, perhaps beyond midnight. But as really the people here in the Square are focusing on Pope passed, Pope Francis, really increasingly, there is more and more speculation, which actually began before Pope Francis passed away.
It really intensified while he was spending those 38 days in the Gemelli Hospital with double pneumonia. But certainly, the talk, the speculation, and the behind-door politicking is well underway to see who will succeed Pope Francis.
One of the top candidates to succeed Francis is the man who served as his second in command, the current Vatican Secretary of State Cardinal Pietro Perlin. From visiting war-torn Ukraine to brokering a deal that saw the Holy See mend ties with China, the 70-year-old Italian is seen as a skilled diplomat and a conciliatory figure who could appeal to both conservatives and progressives. His election, however, could lead to clashes with the Trump administration as he has rebuked the U.S. President's Gaza plan.
Another top contender is Cardinal Fridolin Ambongo Besungu of the Democratic Republic of Congo, a strong defender of democracy and human rights. Ambongo has been Cardinal since 2019.
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CARDINAL FRIDOLIN AMBONGO BESUNGU (through translator): I am happy. I'm aware of the responsibility this appointment brings.
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WEDEMAN: That responsibility has seen him stand up to warlords and corrupt leaders, becoming a respected moral voice. The 65-year-old is also the leader of a massive local church of more than 7 million people and represents the growing church in Africa.
A surprise candidate may be Cardinal Robert Prevost from the United States. America's global influence has made electors shy away from choosing a U.S. pope in the past. But the 69-year-old from Chicago spent many years working in Peru before leading the powerful Vatican office for bishop appointments, and he shouldn't be ruled out.
The top contender, though, may hail from one of the corners of the globe where the church has been growing, and few Cardinals are as charismatic as Luis Antonio Tagle from the Philippines, often dubbed the Asian Francis.
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CARDINAL LUIS ANTONIO TAGLE: We believe that Jesus is alive and he was born in the minister. He died and rose from the dead in Asia.
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WEDEMAN: The 67-year-old led the church's charitable arm as well as the Vatican Department of Evangelization. And he may be well positioned as the church pivots towards parts of the world where it is expanding. Still, it's impossible to say which, if any, of these candidates will be chosen. If there's anything we can glean from past conclaves, it's that usually the favorites don't get picked.
Now, as far as when this conclave is going to take place, according to the rules laid down by Pope Francis, new rules, it should be between 15 and 20 days after the death of the Pope which means that at the earliest, the conclave would begin on Monday, the 5th of May.
And of course, what's going to come out of it is really impossible to say because going back to 2013, following the resignation of Pope Benedict XVI, there were lots of talk about top contenders, but the man who actually won the election in the conclave was Jorge Bergoglio, later to become Pope Francis, and he was not somebody anybody was really talking about as a possible successor to Benedict XVI. So there will probably be, Brianna, surprises in store.
KEILAR: All right, we'll be watching closely. Ben Wedeman, thank you so much for that. And America's top diplomat cancels last minute on a key meeting on peace talks between Russia and Ukraine, as the vice president issues an ultimatum.
[14:25:00]
We'll have the latest threat from the White House next, and new reporting on alleged chaos at the Pentagon. Sources telling CNN, President Trump has begun asking questions about Secretary Pete Hegseth's performance.
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KEILAR: President Trump is lashing out at Ukraine after Ukraine's President Volodymyr Zelenskyy said his country would not agree to a U.S. peace deal that includes giving up territory to Russia. The president posted on Truth Social today, accusing Zelenskyy of making inflammatory comments. He said, "We are very close to a deal, but the man with no cards to play should now finally get it done." A European official telling CNN the U.S. is pushing for that deal to have --
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