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Stocks Surge as Trump Signals Possible U-Turn on China Tariffs; Top Retail CEOs Warn Trump His Tariffs Could Lead to "Empty" Shelves; CNN Goes Inside St. Peter's Basilica Where Pope Francis Lies in State; Thousands Line Up to See Pope Francis' Body Ahead of Funeral. Aired 3- 3:30p ET

Aired April 23, 2025 - 15:00   ET

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

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BORIS SANCHEZ, CNN HOST: From tough talk to a possible trade truce, Wall Street breathing a sigh of relief after President Trump suggests he's open to de-escalating his trade war with China. But where's the off-ramp? What's next in the fight over tariffs that's caused so much turmoil in world markets?

BRIANNA KEILAR, CNN HOST: A farewell to Francis, 10s of thousands lining up to pay their respects to the late pontiff. Cardinals are in mourning, too, but they also have a huge task ahead, deciding who among them should follow Francis as pope.

And push for peace. As the U.S. works with Russia and Ukraine to end the war, the status of Crimea could be a major sticking point. One European official says President Trump wants a deal before the end of his first hundred days in office, which is next week.

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

SANCHEZ: So today, markets have been trending higher on new comments from President Trump on China. The President saying in the last 24 hours that tariffs will, quote, "come down substantially." And then this morning, adding, quote, "we're going to have a fair deal with China."

KEILAR: Still unanswered, though, is when all of this could happen.

Moments ago, White House Press Secretary Karoline Leavitt said this about the timing.

(BEGIN VIDEO CLIP)

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: Let me be clear, there will be no unilateral reduction in tariffs against China. The President has made it clear China needs to make a deal with the United States of America. And we are optimistic that will happen. And when that continues, it will be up to the President what the tariff rate on China will be. (END VIDEO CLIP)

KEILAR: Let's go now to the White House, where our Jeff Zeleny is with more on this U-turn on messaging.

Jeff, what else is Trump saying? And do we know what's behind all of this?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well, look, you may wonder what was the point or what is the point of all of this anyway. And actually, that's what the White House Press Secretary Karoline Leavitt was asked by reporters shortly after she did that Fox News interview. And she said leverage. This has all been about leverage. But the reality here is that the U.S. has blinked. China has not. We will see where this goes forward.

But one person at the center of all of this sort of change in conversation, change in focus here at the White House is the Treasury Secretary, Scott Bessent. He's been sort of the calming presence to the markets. He had this to say in a speech earlier today to the IMF.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, TREASURY SECRETARY: I wish to be clear, America first does not mean America alone. To the contrary, it is a call for deeper collaboration and mutual respect among trade partners. China needs to change. The country knows it needs to change. Everyone knows it needs to change. And we want to help it change because we need rebalancing, too.

(END VIDEO CLIP)

ZELENY: So we have seen a series of postures really about the last several weeks. First, it was tough talk on China, no doubt about it, as the trade war escalated. And the Treasury Secretary is saying that China needs to change, but the U.S. does need to change as well. So a softer tone across the board, there is no doubt about it. The market likes that.

But one of the other reasons we are learning there's a sort of a new posture here is because of a private meeting that the President had Monday in the Oval Office. We learned earlier today that the CEOs of Wal-Mart, and Target, Home Depot and Lowe's - of course, major American retailers - had a private meeting with the President in the Oval Office on Monday. They were talking about the supply chain disruption.

And one warning, I'm told, was as blunt as store shelves will be empty in the coming weeks if there is not some type of a new deal that is struck.

[15:05:03]

So I'm told that that is something that resonated with the President. And it's one of the things that led to his change of tone here. But again, no tariffs have been negotiated. So we will see where this goes. But certainly on this Wednesday, a new posture, at least from the White House, on this tariff policy. Boris and Brianna?

SANCHEZ: We'll see if it potentially changes again sometime soon.

Jeff Zeleny, live for us at the White House. Thanks so much.

Let's bring in CNN's Vanessa Yurkevich, who has an update now on markets. Vanessa, they appear to be responding well to two things: first, the softening of a tone when it comes to the approach with Beijing, but also Trump's comments about Fed Chair Jerome Powell, right?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, exactly, Boris. And I've been speaking to analysts for weeks now, and I've been asking them, what are the two main things that you've been looking at, that you've been following as indicators for where the market is going. And it is those two things specifically. It is the trade war, and it is Jerome Powell's fate and future.

And on both of those fronts, investors, traders believe they're seeing encouraging news from the secretary - the Treasury Secretary, Scott Bessent - hearing that there will be a de-escalation with China in the near future, and hearing from the President directly that he is looking at lowering tariff rates with China. Not to zero, but a de- escalation nonetheless.

And then also from the President saying that he is not looking to fire Jerome Powell. That was a huge, huge concern on Wall Street about the independence of the Federal Reserve Bank and of the head of the Federal Reserve, Jerome Powell.

But if you look at stocks right now, the Dow up 400 points, been up most of the day, coming off a little bit the session highs, but still in the green. And that's really extended the gains that we saw yesterday.

Also look at CNN's Fear and Greed Index. This is sort of sentiment among investors, and it is now in fear territory. It was in extreme fear territory for weeks now. This is the best reading, though, in fear territory that we're getting since March 27th.

Now, just because the market is up or in the green, it doesn't erase the $7.3 trillion in losses that the market has seen since its highs in February.

And Greg McBride - he's a chief financial analyst at Bankrate - he sort of summed up how the market is feeling right now. This is what he said. He said, "A softer tone about the Federal Reserve is welcome news to investors, and the market has responded to that. Turning down the heat in the trade war with China is nice to hear, but it will ultimately need to be followed up by action. Where the rubber meets the road is in the details of the eventual trade agreement. Until then, uncertainty will continue to hang over the economy and financial markets. And that is exactly what investors are indicating, that this is good, positive news. But the details - the deals - they want to see deals on the table. That'll help calm fears even more.

Boris and Brianna?

KEILAR: All right. Vanessa Yurkevich, thank you so much.

And let's talk about this more now with Neil Irwin, who is Chief Economic Correspondent for Axios, and Gavin Bade, who's Trade and Economic Policy Reporter for The Wall Street Journal.

Gavin, and I'm really interested to talk about your exclusive reporting that you have on how the White House is thinking about China in this trade war. Because what appears to be a turnaround, a Trump- aligned economist, Stephen Moore, earlier told us was actually just a strategic advance. What are you hearing?

GAVIN BADE, TRADE & ECONOMIC REPORTER, THE WALL STREET JOURNAL: Well, that is how the White House would like to phrase it - is that this is all art of the deal, and they were going to escalate to de-escalate, so to speak. I think that's one school of thought. The other one is that they're feeling the heat from markets - both the stock market and the bond market - and they're feeling the heat from those retail CEOs, like your correspondent just mentioned. And I think that they just know that this is an unsustainable path that they're on right now.

A 145 percent tariff is basically a trade embargo on China. There's only so long that the U.S. can do that with its third-largest trading partner before consumers really start to feel the pinch.

SANCHEZ: To that point, Neil, I wonder what you make of Bessent saying that China needs to change, that they need to rely less on exports to rebalance both economies. Can the U.S. achieve that, given the posturing that they've held until now and now this softening?

NEIL IRWIN, CHIEF ECONOMIC CORRESPONDENT, AXIOS: Yes, look, there's some truth to the idea that there's industrial overcapacity in China - that this undermines manufacturing in the rest of the world. The Biden administration pushed on those themes. Going back to Obama, that's something that U.S. leaders have been critiquing for a long time.

I think, the question is, is 145 (INAUDIBLE) China - which includes a lot of low-value goods, a lot of, you know, stuff that's not exactly the cutting-edge industries of the future - is that a way to address those problems?

And if it's just a tool of leverage, then the question is, what is the United States going to be asking for in these negotiations? That's what's not crystal-clear right now. When are some negotiations going to occur, who's going to lead them and what are the exact asks the U.S. government has out of China?

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KEILAR: And Neil, as the President was, you know, he seemed to really emphasize to reporters today, oh, yes, they're actively talking to China. How actively engaged are U.S. negotiators with Chinese negotiators right now?

IRWIN: Well, it looks like they're not. It appears that there are no active talks. In fact, Treasury Secretary Bessent earlier, speaking to reporters, said that it's a mixed blessing that the highest - the strongest contacts are between himself and President Xi in China, and that a level below - the normal kind of mid-level, upper-level officials who do these negotiations - do not have lines of communication.

It's kind of both sides are waiting for the other to start things, and that's what you heard the press secretary say a little bit ago. They want China to pick up the phone and say, we're ready to deal. Until somebody does that - until somebody breaks the impasse - there's not going to be active talks to create off-ramps from this.

What's - as Gavin said, it's basically a trade embargo from the U.S. and China, shutting down trade between the two largest economies in the world.

SANCHEZ: Meantime, President Xi is touring Southeast Asia, striking deals with trade partners. I wonder, to Neil's point, what are the non-negotiables for the U.S.? Because they've talked about bringing tariffs down, they've talked about non-monetary barriers and that sort of thing. What is it that they actually want and need?

BADE: Well, our trading partners would love to know the answer to that question. A lot of them are wondering the same thing. Even those that are further along in talks - whether it's the Japanese, the European Union, whoever - they don't know exactly what the U.S. wants. But publicly, the U.S. has said: lower tariffs, lower non-tariff barriers like regulations on U.S. products in their economies, and then cutting out China in some respects from their economies - saying, don't locate Chinese firms in your economy so they can export to the United States.

Don't allow them to trans-ship Chinese goods through their economy to avoid tariffs. And I think this might be a sticking point, especially with these economies in Southeast Asia, many of whom are very reliant on China, as they are on the United States. What I'm hearing behind the scenes is a lot of these finance ministers in town this week are saying, don't ask us to choose - because we'll tell you both no. They want to have an integrated global economy. They don't want to see it fragment into two different economic poles here.

KEILAR: It also, Gavin, may come down to who has the higher pain tolerance, right? And I wonder, as you're looking at this, who do you think does - the U.S. or China?

BADE: Well, it's very difficult to know at this point. I mean, we're seeing a lot of pain in the United States, especially in the stock market now. And we anticipate consumer pain in the future if we don't see a change of course here. Of course, the Chinese economy doesn't need to - the Chinese government doesn't need to be as receptive to public demands as the U.S., but their economy is really teetering. They're struggling with growth. They're struggling with a lot of their manufacturing industries, their real estate industry.

And so this is a very high-stakes game of chicken. And I think, you know, both sides would appreciate bringing the temperature down a little bit if one of them can just be the bigger man and pick up the phone here.

SANCHEZ: So Neil, who - to Brianna's question - who has the higher pain threshold? Who picks up the phone first?

IRWIN: Yes, look, I'm not going to predict that, because I think it's - you know, there's a thing in negotiating theory that you always want to not be the first person to speak. And then that's kind of what's applying here on massive world stakes as we look at it. But look, the pain threshold is one where, you know, the President doesn't want a recession.

For all the administration talks about, some pain is necessary to get to a new golden age for the U.S. economy. No president likes to oversee recession - especially one that's kind of self-instigated and brought upon themselves.

So, look, I think what we saw today was the beginning of that de- escalation in the last 24 hours. Getting from here to active, concrete talks is the hard part, but I don't think it's that far off.

SANCHEZ: Neil Irwin, Gavin Bade, appreciate the perspective. Thanks so much for joining us.

Still to come this afternoon: the beginning of a historic farewell. Faithful from around the world are lining up to see Pope Francis' body lying in state in St. Peter's Basilica, as the Vatican prepares to lay him to rest.

KEILAR: Plus, the city of Uvalde approves a settlement with the families of the Robb Elementary School victims. We'll have details on that.

And then later, Secretary of State Marco Rubio skipping a major meeting in London - talks to bring an end to Russia's war on Ukraine. As President Zelenskyy says, Ukraine will not recognize Moscow's occupation of Crimea. We'll have that and much more coming up on CNN NEWS CENTRAL.

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SANCHEZ: For the next three days, the body of Pope Francis will lie in state at St. Peter's Basilica in Vatican City. And as we look at these live images, some of the thousands of mourners waiting in long lines to pay their respects have been describing the moment as an emotional experience. Others say it's been very humbling.

CNN Chief International Correspondent Clarissa Ward is there for us.

(BEGIN VIDEO CLIP) CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT: We've just exited the Basilica, where the body of Pope Francis is lying in state and will be for the next few days. There were hymns being sung softly by a choir, prayers being said, and this long line of largely silent people filing in quietly to pay their last respects to the leader of the Catholic Church - who many really viewed as transformative.

And looking at the crowds who were waiting to go and pay those last respects, you could see that some of them were there to mark a moment in history.

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Some of them perhaps had already been here in Rome when Pope Francis died. Others, clearly deeply moved by his life, by his legacy. Quite a bit of emotion from some people, trying to take the time to pray and have some reflection. We saw a lot of families, babies, children hoisted on shoulders. And of course, a lot of people - as is common in the world today - with their iPhones, trying to capture this moment.

And although Pope Francis was very emphatic about his desire to live a simple and humble life, when you're standing in that basilica - in that extraordinary space - there is certainly an air of majesty.

Now we're outside, and you can see some people are exiting. But over here, long lines snaking around as people wait for their turn to go and pay their respects. When Pope John Paul II died, hundreds of thousands came. And we spoke to one person who has been covering the Pope for many years, who said that the more people saw the images on television of visitors filing past to see the body of Pope John Paul II lying in state, the more visitors then began to flock to St. Peter's Square to be part of this historic moment.

And so we will see in the coming days as more and more people gather to remember Pope Francis.

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SANCHEZ: Our thanks to Clarissa Ward for that report.

The big question now is: who will replace Pope Francis. He was the first Jesuit priest to rise to the papacy, and many Catholics can only wonder if the next pope is going to be a like-minded reformer - or someone perhaps more conservative, like Pope Benedict.

KEILAR: With us now is Father Sam Sawyer. He is a Jesuit priest and the President and Editor-in-Chief of America Media, a Jesuit publication.

Father, thank you so much for being with us. As we are looking with so much anticipation towards the College of Cardinals meeting soon to select the 267th head of the Catholic Church, what are you looking for - and do you have any predictions?

REV. SAM SAWYER, JESUIT PRIEST: Well, my main prediction is that I think we will all be surprised, as we were surprised by the election of Pope Francis 12 years ago. I think it's really hard for anyone to predict what's likely to happen out of the conclave, in part because Pope Francis so tremendously broadened the range of cardinals that we have. He's named about 80 percent of the cardinals who will vote to elect his successor, and he named cardinals from - I think - 75 different countries, about a third of which had never had a cardinal before.

So, we now have a cardinal from Mongolia. We have cardinals from really the peripheries of the Church. And so I think the makeup of this College of Cardinals is unlike anything we've ever seen before in a conclave.

SANCHEZ: What are the odds that another Jesuit could be picked as the next pontiff?

SAWYER: So I think nil, basically. But I would have also said that, you know, when Francis was elected, I would have said there's no chance a Jesuit would be elected pope. So, but I think it's very, very unlikely.

I mean, I think to the degree that you can predict anything about this conclave, I think what the cardinals are likely to be looking for is someone who will help the Church sort of stay the course - who will help to consolidate and sort of balance out a lot of the new things that Francis has introduced, both in his style, his way of being pope, and then also things like the emphasis on synodality as a way for the Church to be in conversation together.

I think that there's probably a desire for the momentum of change to slow down a little bit, and for the Church to have a chance to sort of digest and integrate the new things that Pope Francis has begun.

KEILAR: And, you know, Father, for a Church that is known for some pomp and circumstance, it's really extraordinary - the simplicity that Francis has opted for in his funeral service. Talk to us a little bit about that.

SAWYER: Well, you know, he - that was his style throughout. He wanted to be close to people. He wanted not to emphasize the sort of the majesty of the office, but rather to emphasize his role as - one of the titles of the Pope - the servant of the servants of God. He wanted to, I think, be seen more as a pastor than as a prince. And that's the way he conducted himself.

It's also reflected in the name he chose - you know, naming himself inspired by St. Francis of Assisi, who lived so simply, with such a desire to reach people and help people be reconciled with each other.

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I think that's really the style that he worked from, and that's also what's been reflected in the way he simplified the papal funeral liturgy as well.

SANCHEZ: Yes, I wonder what you think the most lasting impact he will have on the Church will have been. What will be Pope Francis's legacy? SAWYER: So, the - I would say two things there, one is this change in style, so bringing the papacy closer to the people, giving this more pastoral accessibility and simplicity to the papacy. I think that's a change that will be lasting. I think future popes - there's sort of a level of access and a level of closeness to people that will continue. I mean, it will be different under the next pope as he adopts his own style as well, but I think that's a pretty fundamental change in how we think about the papacy that is likely to be lasting.

The other big thing I think is his emphasis on synodality and the work done particularly over the last two years with the synod on synodality as a way for a broader cross-section of the Church beyond just the bishops and the cardinals, but also involving laypeople, involving people from every corner of the Church. I think that turn to the margins of the Church and making sure that everyone's voice is heard at the center of the Church - that will also be a lasting impact on the Church.

KEILAR: Reverend Sam Sawyer, we appreciate you being with us so much today as we are looking at some live pictures of all these folks who are filing into the Basilica. Thank you for your time.

SAWYER: Thank you very much.

KEILAR: And still to come, uncertainty over the Trump administration's diplomatic efforts to end Russia's war in Ukraine, the Vice President issuing an ultimatum and telling Russia and Ukraine it's, quote, "time to say yes to the U.S. proposal or else."

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