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White House Admits No Negotiations with China, Despite Trump Assurances; DHS Begins Enforcing Real ID Rules Tomorrow; Trump Considering Limiting Payments to College Athletes. Aired 3:30-4p ET

Aired May 06, 2025 - 15:30   ET

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

[15:30:00]

BRIANNA KEILAR, CNN HOST: After weeks of alluding to ongoing communication with China when it comes to tariffs, a different message from the administration today. Treasury Secretary Scott Bessent said this as he fielded questions about President Trump's trade war at a Senate hearing.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, TREASURY SECRETARY: There are 18 very important trading relationships. We are currently negotiating with 17 of those trading partners. China, we have not engaged in negotiations with as of yet.

(END VIDEO CLIP)

KEILAR: Arthur Laffer joins us now. He's the founder of Laffer Associates. He was an economic advisor to President Reagan and also to the Trump 2016 campaign.

So, Arthur, we see Bessent saying the U.S. is negotiating with 17 trading partners. They're not negotiating with China. That is not what the president had led us to believe. Why not be straight on it, do you think?

ARTHUR LAFFER, FOUNDER, LAFFER ASSOCIATES: Well, I don't know about the being straight on it, but it's really very, very important, Brianna, that we do negotiate with China. They're the largest other country for us to trade with. They're a perfect trading partner.

You know, it is especially important that we get trade agreements with those countries we don't really like. We need them with Russia, with China, with Iran, with North Korea. You know, once you start doing business with these countries, you start celebrating birthday parties and anniversaries and you get the talk issues out, you don't fight them out.

So it's really important to make sure that we have trade with these countries to make sure we bring down the threats of World War. My colleague, Bob Mundell, said it was the Smoot-Hawley tariff that caused the Great Depression, which caused World War II. There is nothing better for peace than negotiating trade with potential enemies. It's really important to talk issues out, not to fight them out in a trade war. KEILAR: How long can the U.S. go without a deal with China? How long? Like, if you can actually put a timeline on what can be tolerated, what would you say it is?

LAFFER: Well, the production process and all of that is fairly quick. I mean, you need to get your facilities in the chain of production in order fairly quickly. I would put it that we need to get something going and something ongoing within 30, 60, 90, maybe 120 days.

If it gets to extend past six months, eight months, nine months, it really does disrupt the supply chains. And that you don't want to happen. You want to really make it smooth and easy.

You know, trade is one of the most important features of a prosperity and peaceful world. It really, really is. And you can't let it go too long.

And you need to lower tariff barriers. You need to lower protectionist barriers. You need to lower quotas dramatically.

And it's especially important for us with China. It really, really is important. Now, the other countries are important, too. Don't get me wrong. But China is the one where we have the most conflicts with that we really need to bring the temperature down fast. And I think that's one that's critical right now.

[15:35:00]

KEILAR: When you start saying several months, I mean, we already see the first cargo ship. And I know you're saying 30, 60, 90 days. And then this specter of several months. The first cargo ships that are carrying Chinese goods with these 145 percent tariffs are arriving in L.A. I know you've been tracking this. They're half full. We're going to be seeing shortages very soon, higher prices. We already know that Amazon, Walmart, some of these huge retailers are already reporting higher prices, 1 percent, 2 percent, 4 percent depending on.

And when Republicans looked at that kind of increase in cost and it was the responsibility of inflation, they didn't tolerate it. And Americans, most importantly, were very clear that they did not tolerate it in this last election. So what do you think their toleration level is on this? I don't know if it's several months.

LAFFER: Well, I don't know if it is there for their toleration. I don't know that. But what I do know is that the supply chain links are really important to set up long-term gains from trade.

We have comparative advantage gains from trade, which is they make some things better than we do, and we make some things better than they do. We would be foolish in the extreme if we didn't sell them those things we make better than they do in exchange for those things they make better than we do. That's called the gains from trade. And it's really, really important on a global scale.

Now, I would not worry nearly as much about the inflationary aspects of trade because, frankly, when the import prices do go up, but in symmetric terms, the export prices are going to go down. So they basically offset each other.

This is not an inflation issue.

KEILAR: No, that's not what I'm saying.

LAFFER: This is a production and gains from trade issue where we get profit.

KEILAR: But, Arthur, whatever the increase is due to, it's more money coming out of someone's pocket, right? So whether it's inflation or whether it is increased prices due to a trade war, Americans experience it all the same, right? So it's the question of how long they're going to put up with it.

LAFFER: Well, I wouldn't, yes. Well, I don't know how long they're going to put up with it. For us in the Great Depression, if we put up with it for 10 years. I mean, it was a horrible putting up for it. In the Nixon administration, when Nixon put on the 10 percent import surcharge and disallowed foreign capital from the investment tax credit, you know, that was the 1970s, which is a terrible period in the economy, all caused, in my view, by the Camp David surcharge on tariffs. I mean, it was a bad policy.

I don't think inflation is where you need to look at the problem. It really means the value of our incomes will drop, not because of prices, but because the goods we produce don't exchange for much more goods from abroad.

That's really where the problem is. It's not in inflation. It's in loss of good jobs, loss of capacity to buy goods and services. And that's where the real problem rests. And it's really, really very serious. And I hope this administration is taking it enormously seriously and will really get good trade deals.

We need to get good trade deals. We need to make it reliable, fair, equal, and have that go on. But get it done quickly. It's really important to get it done quickly.

KEILAR: Certainly is. And I don't mean to discount concerns about inflation. There are certainly some as we are looking at these tariffs.

Arthur Laffer, it's great to have you. Thank you so much.

LAFFER: Thank you very much, Brianna.

KEILAR: And still to come after 20 years, the deadline to get your Real ID. It's finally upon us, people. So what happens if you show up tomorrow, maybe for a flight, and you don't have one? We'll tell you.

[15:40:07]

(COMMERCIAL BREAK)

ERICA HILL, CNN HOST: The deadline is real. Starting tomorrow, the Department of Homeland Security will be enforcing that Real ID security restriction, which means if you're traveling without a Real ID, you could hit some hurdles at U.S. airports as you go through TSA. So will you actually be turned away?

Here's what DHS Secretary Kristi Noem had to say earlier.

(BEGIN VIDEO CLIP)

KRISTI NOEM, HOMELAND SECURITY SECRETARY: What will happen tomorrow is folks will come through the line and will issue their ID and show it. If it's not compliant, they may be diverted to a different line, have an extra step, but people will be allowed to fly.

(END VIDEO CLIP)

HILL: OK, so you can still fly, just bank some extra time.

Danny Freeman joining us now to explain further what else will happen tomorrow if you don't have the proper ID yet. And in some states, it's a little harder than others, Danny, because you can't just stand in line everywhere.

DANNY FREEMAN, CNN CORRESPONDENT: Yes, that's absolutely right. Listen, I think the message from the TSA right now is don't panic, but this is going into effect tomorrow. However, they're going to work with airline passengers to make sure that their entire trips are not disrupted if they do not have that Real ID just yet.

But that was news, frankly, that we heard from the DHS Secretary. And also, I spoke with the TSA who confirmed that also earlier today that if you are going to the airport tomorrow and you don't have a passport, you don't have a Real ID, you just have a regular driver's license, yes is the answer. You will be able to board your flight. You won't be turned away.

But as you noted, Erica, you should just leave extra time because you could be subject to additional screening. Perhaps at some airports, even a different line to get in as you're going through TSA checkpoints and TSA security.

I want you to take a listen to what a TSA official told me earlier today and then on the back end, I'll tell you kind of what we've been hearing and seeing at DMVs across the country. Take a listen.

(BEGIN VIDEO CLIP)

STEVE LORINCZ, TSA ACTING EXECUTIVE ASSISTANT ADMINISTRATOR FOR SECURITY OPERATIONS: We are going to process you. It might take some additional time, but we're going to do it efficiently. We are fully staffed at all locations across the country. So I don't anticipate any wait times or delays as far as you're going through the security process. But we will process you. You will not be turned away.

(END VIDEO CLIP)

[15:45:00] FREEMAN: So again, Erica, the challenge right now is that people are still in the middle of working on this process of getting their Real ID. I've been speaking to folks here at the Department of Motor Vehicles in Camden, New Jersey. And folks said that they came, they got appointments. Some were successful and got through the whole application process. Others were still missing certain amounts of IDs. You can still apply for a Real ID. That process is not stopping.

About 81 percent of Americans right now are compliant and able to fly. It's according to, again, DHS and TSA. But the federal government is still encouraging people to go through the process, get your Real ID, even as this deadline approaches -- Erica.

HILL: All right, Danny. Really appreciate it. And thanks for battling the wind for us, too.

FREEMAN: No problem.

HILL: Still to come here, President Trump diving into the long-running debate over paying college athletes. What he says he's now considering for players with those name, image, and likeness deals. That's next.

[15:50:00]

(COMMERCIAL BREAK)

HILL: Let's get you caught up on some of the other headlines we're following here at CNN NEWS CENTRAL this hour.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is your last chance to leave the building. Uniformed police officers will be entering the building.

(END VIDEO CLIP)

HILL: That demand from police directed at pro-Palestinian protesters who occupied an engineering building at the University of Washington last night. More than two dozen were arrested. It is unclear how many of them are UW students.

The demonstrators want the school to sever its ties with Boeing over Boeing's military contracts and role in supplying weapons that have been used in the war in Gaza. The university says that the rally was organized by a student group that has been suspended by the school.

KEILAR: And a man is in custody after he allegedly drove a car through the gate of Jennifer Aniston's Los Angeles home. He's described as a white man in his 70s, and he was held by a security guard on the premises until police arrived. Aniston was home when it happened, but police say they have not determined whether this incident was intentional.

And then finally, an update on the young man who fell onto the field during a Pittsburgh Pirates home game last week. The mother of his girlfriend says Kavan Markwood took his first steps since the incident yesterday, but also says the 20 year old is suffering from a broken neck, a broken clavicle and a broken back. Markwood fell some 20 feet over the right field wall last Thursday. A GoFundMe campaign to help with his medical bills has raised more than $43,000.

And we'll be right back after a quick break.

[15:55:00]

(COMMERCIAL BREAK)

KEILAR: A source tells CNN that President Trump is seriously considering executive action to limit payments to college athletes.

HILL: No decisions have apparently been made yet. It's not clear what that action could actually be, but Trump and former University of Alabama football coach Nick Saban did speak at the school's commencement last week where, according to the Wall Street Journal, the two discussed NIL deals and Saban's belief that the inflow of money is damaging college athletics.

Joining us now is broadcaster Bomani Jones. He, of course, is host of The Right Time with Bomani Jones podcast. It's great to have you here.

You know, if we just step back for a minute and we look at what has changed in college sports -- and I do this based on what I hear my husband and my teenage sons yelling about when they're watching the TV. Do you think the NIL has tainted college sports and college athletes?

BOMANI JONES, HOST, THE RIGHT TIME WITH BOMANI JONES PODCAST: I mean, I don't think anything was more ignoble. I don't know if that's the right word. I don't know if anything was more immoral -- that's a better way to put it -- than having those guys out there and not giving them any money. That was the most tainted thing that could ever happen to college athletics.

This is making things a little bit less charming. I think that's a fair point. But the problem right now is that the NIL situation is chaotic. It is not that the players are getting paid too much money.

KEILAR: So what would it mean if President Trump weighs in and changes rules -- or attempts to, I should say, because it's unclear what he can do. What would it mean if he weighed in and did something like that when it came to NIL?

JONES: Well, I will say that these last hundred days have not told me that Donald Trump is good at bringing order to chaotic situations. But what it would mean to me is stepping back from the progress that has been made, which is having NIL payments, which is only the beginning because revenue sharing is coming right around the corner. But what is needed in the game is order.

It is not pulling back the money. I don't know who told Donald Trump that that was the problem, but that is not it.

HILL: So if it's not about pulling back the money, if it's about order, how open do you think the major conferences, the coaches, the athletes are to a more orderly process, I guess, or handling of these deals?

JONES: I think everybody's open to a more orderly process because we're in situations where players can have deals pulled up from under them. And then also situations where players at every turn are asking for more money. Nobody, I think, likes the way that things are right now.

So if Trump could bring order to this, which I don't think he can, it would be fantastic. The problem is the folks involved with college sports have all asked somebody else to be the one to come up with the solution. And the players legally are not able to get into a situation where they have a voice at the table to even say what it is that they need.

This is all the fault of colleges and the NCAA refusing to acknowledge that the future had come and trying to find an orderly way to do this. Instead, hoping that chaos would tear everything down and the players would stay broke. They're not going to be broke again, because even if you cap how much you can pay people, we have seen people are willing to go to jail to trick off on college athletes.

KEILAR: Yes, no doubt. It was Nick Saban who clearly was influential in the conversation that he had. And knowing that, Bomani, I wonder who else you think the president should be speaking to here so that he gets a fulsome sense of this issue?

JONES: He should be talking to players, right? They are the involved parties that always wind up just having to do with somebody else said. If we're going to on its face assume that Donald Trump means well, then to me, meaning well means to involve the players in the discussion.

If we are going to make that assumption that I understand is a bit fraught logically.

KEILAR: And he has players that come to the White House, right? I mean, he has some opportunities to pick their brains on this.

JONES: He absolutely does.

[16:00:00]

But I have no reason to believe that anybody who sees himself as a titan of industry, which is how Trump sees himself, would ever be in this in the name of labor.

HILL: Listen, you make great points about the voices that need to be involved in this discussion that weren't involved for so long and still aren't. Bomani Jones, really appreciate it. Thank you.

JONES: Thank you.

KEILAR: And "THE ARENA" with Kasie Hunt starts right now.

END