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U.S. And China Agree To Roll Back Tariffs In Major Trade Breakthrough; Soon: Testimony Resumes In Sean Combs Sex Trafficking Trial; Trump Defends Plan To Accept Luxury Plane From Qatar. Aired 7:30-8a ET

Aired May 13, 2025 - 07:30   ET

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

[07:30:00]

KATE BOLDUAN, CNN ANCHOR: So this morning positive news on the economy. In the wake of the U.S. agreement with China to roll back tariffs for at least 90 days, Goldman Sachs is revising its recession forecast, now cutting the odds a recession is coming in the next 12 months by 10 percent.

CNN's Matt Egan has -- is here with much more on this. I mean, we're not out of the woods yet. We've got still Trump warning that it could go back up if they don't reach a deal.

But what do you -- what is Goldman seeing here?

MATT EGAN, CNN REPORTER: Well, Kate, it's funny. Two things happen every time the president dials back tariffs. The stock market skyrockets, and recession fears go down, and that same pattern is playing out right now, right? Yesterday, the market surged and --

BOLDUAN: So you're saying there's a lesson in there.

EGAN: I'm saying there's a pattern for sure.

And look, economists are getting more hopeful that the economy --

BOLDUAN: Yeah.

EGAN: -- might avoid a self-inflicted recession.

So Goldman Sachs previously had said that there was a 45 percent chance of a recession over the next 12 months. They are now cutting that to 35 percent specifically because of this breakthrough between the United States and China that has dramatically lowered tariffs.

Now, Goldman Sachs is also upgrading their outlook for 2025. They're still projecting sluggish growth but positive at one percent. They're also expecting the unemployment rate, yes, to go higher but not as high as previously. They're expecting inflation to go up. But again, not as much as previously feared.

And they no longer think the Fed needs to come to the rescue this summer. They think the first rate cut is going to be delayed until December.

Now, to your point, the economy is not completely out of danger yet, right, and it's not like tariffs are suddenly low.

BOLDUAN: Yeah.

EGAN: They are not.

Look at this chart. This is from Goldman Sachs, where they are penciling in the U.S. tariff rate. And look, it is still expected to go basically straight up, still going to the highest level in nearly a century. It's just not quite as high as previously when basically trade between the world's two biggest economies was paralyzed.

BOLDUAN: Yeah.

EGAN: One last point here, though, Kate. I would just stress there's no precedent here, right? There's no playbook. We don't actually know what happens to a modern economy after going through this many shocks --

BOLDUAN: Yeah.

EGAN: -- in this short amount of time, but we're about to find out.

BOLDUAN: It's a good point. There really isn't precedent. You can't really -- it's -- the way -- how intertwined the global economy is --

EGAN: Yes.

BOLDUAN: -- and what this means. That's a great point.

There is a new analysis though on -- even with the dial backs and the rollbacks how much the tariffs, the trade war, the ongoing is going to cost Americans.

EGAN: Yeah. This is coming from The Budget Lab at Yale, and they are warning that, yeah, these import taxes are going to eat into household income. They're projecting that these tariffs -- the lower tariffs are still going to cost the typical middle-class family about $2,200 per year. That is lower than their estimate back in mid-April but still, that is not chump change. That is a significant amount of money.

And that's because they're expecting higher prices for a lot of different goods, including leather goods. Also, cars, auto parts, computers, clothes. All of these things are expected to have higher prices.

And yesterday I talked to a small business owner, Bobby Javaheri. He owns a California appliance business. And speaking of higher prices, he said look, they've already increased their prices because of the tariffs on China. And he said that if the tariffs had stayed in place his company would be out of business.

BOLDUAN: Well, see, this is important because we just heard the commerce secretary saying don't believe that the -- that the tariff is going to be passed along to the consumer --

EGAN: Yeah.

BOLDUAN: -- and be higher prices. That's just not the case.

EGAN: Right, and often it will be. Companies have to decide are they going to eat this, but that might mean they're going to hire fewer workers. You're going to have smaller profits. Or more likely, are they going to pass at least some of this along to all of us as consumers.

BOLDUAN: Yeah.

All right, Matt. Thank you so much.

EGAN: Thanks, Kate.

BOLDUAN: OK -- John.

JOHN BERMAN, CNN ANCHOR: All right. With us now, Canadian businessman and CNBC contributor Kevin O'Leary. He is the chair of O'Leary Ventures. Kevin, great to see you this morning.

So before the weekend meetings in Switzerland you were pushing President Trump to raise the tariffs from 145 percent to 400.

You said, "My advice to President Trump is to squeeze China even more. Or, put another way, it should shut down trade with China completely. Not only will this force a fast resolution, it will also send a clear message that if it wants to be in the big leagues, China has to play by the rules. To stand up to China means cutting it off, at least for now. It might not be pretty in the short term, but it's ultimately the only way forward."

So how upset are you that he backed off and went down to the 35 percent tariffs -- or 30 percent?

KEVIN O'LEARY, CHAIR, O'LEARY VENTURES, CANADIAN BUSINESSMAN, CNBC CONTRIBUTOR (via Webex by Cisco): I was advocating for 400 percent, which was essentially an embargo -- a complete shutdown of trade -- knowing that the Chinese cannot tolerate that for very long. They have to keep millions of workers working or there will be riots in the streets. And at the same time, the U.S. doesn't want that either.

The point was to get everybody to the table. I suggested Riyadh or Geneva. They chose Geneva. I'm very pleased that happened and we're beginning the narrative.

But it's not just the tariffs. This is the first stage, and we are now in a situation where it's 10 and 10 plus 20 for fentanyl. So 30 percent tariffs in the U.S. of China goods coming in. And they can get rid of 20 percent of it if they solve the fentanyl problem. That, they will do with certainty.

[07:35:05] But I'm not finished there and neither are millions of small entrepreneurs in America that I represent. We need IP law to be finally put into place so that our products and services are protected in their markets the way we protect theirs in ours.

So a reciprocal playing field is where we need to go. This is a great first step but it's only a beginning. Bessent said that they're just starting, and I applaud what they're doing.

BERMAN: What'd you get for this? I mean, what did he get for getting China going down from 145 to 30? You say it's a first step but all you got was more meetings.

O'LEARY: You need more meetings because at the end of the day this is the second-largest market on earth. I want to sell to the Chinese people. I have no problem with the Chinese people. I have a big problem with their government. They don't abide by their rules, and we've known that for a long time.

And no administration has dealt with China even after they came into the World Trade Organization in 2000. They breached every covenant of that agreement with the European partners too.

So it's important for us to set the tone in terms of how we're going to go forward with China. We are in an economic war with them. We don't want a military war. But if they want to access our markets they've got to play by the rules because we still are the largest economy. We represent 39 percent of all goods consumed and a major customer of China. So while we have that leverage let's squeeze and get this thing worked out because it's better for both sides if it's reciprocal, and that's the beginning of the narrative we've got going here.

And one last topic that's coming up in these discussions -- at least I hope -- is their access to our capital markets is not fair. When I go public on Nasdaq or the New York Stock Exchange, I have to abide by the rules, and it costs me millions of dollars to be GAP compliant. The Chinese do not comply with GAP so why are they allowed to even be listed? I want them de-listed until they play by the rules. Keep squeezing -- keep squeezing until we get a fair playing field.

BERMAN: Well, but you don't have that yet, and I understand you're saying this is just a first step.

The Wall Street Journal doesn't think much was achieved here. They wrote, "As with last week's modest British agreement, the China deal is more surrender than Trump victory. Apart from the tariff rollback, neither side announced any broader concessions on the substantive trade issues that weigh on the U.S.-China relationship. Those include China's barriers to American firms, especially in services such as digital and financial, and its chronic intellectual-property theft."

They have the same issues you do. They don't see any progress here.

What lesson do you really think Xi Jinping took from this because he's speaking to Latin American countries today and basically continuing to threaten the United States?

O'LEARY: Well, I think the job of this administration -- and this is unique administration because none before it had ever tried to negotiate 60 trade deals simultaneously. I mean, that's a huge order but they're doing it.

It's this form a circle of friendship. In other words, are you with us or are you not with us against China? That includes Europe, the U.K., which is not a member of Europe, and Switzerland, and India, and Canada, and Mexico. Form that circle of friendship to create a much bigger union between these countries who have a lot to fear about China.

China does not play by the rules with Europeans either. They steal their IP, particularly German IP. And I think they're also tried of it as well.

By forming this bond -- this circle of friendship, which I'm hoping is going to happen here as we go through these trade narratives, we will create a wall of compliance with China. That's what we want. There's been never -- there's never been any consequences for them cheating, ever.

If you're Chinese, you don't even feel bad about stealing IP. I've seen that with my own companies. They run my product during the day, and they rip it off at night and sell it back into the U.S. at a 40 percent discount. That's got to stop. Same thing in Europe.

Now if you have consequences to non-compliance, then all of a sudden when you squeeze their heads they finally start to behave. That's what we need.

BERMAN: Of course, there are questions about whether this circle of trust was perhaps blown up that you're talking about there -- blown up by placing tariffs on all these other countries when you should have been bringing them in to battle China, but that's a discussion for another day.

Kevin O'Leary, thank you very much -- Sara.

SARA SIDNER, CNN ANCHOR: All right. This morning we are standing by for testimony from a star witness in the Sean 'Diddy' Combs criminal trial -- his ex-girlfriend Cassie Ventura. She is the woman he is seen attacking in hotel surveillance video from 2016. Prosecutors said yesterday Combs coerced her and another woman to participate in what he called "freak offs." Combs' lawyers argue it was consensual, not coercion.

CNN anchor and chief legal analyst Laura Coates is outside the courthouse. You have been watching this case with eagle eyes and your legal mind. What can we expect today after explosive testimony yesterday?

[07:40:00]

LAURA COATES, CNN ANCHOR AND CHIEF LEGAL ANALYST: This is going to be one of the most significant moments in the entire case. This is the prosecution's star witness. Cassie Ventura, who he dated for over a decade, has to bridge the gap between Sean 'Diddy' Combs who the public knew and the person that the prosecution describes as a racketeer and a sex trafficker.

We were told by the defense yesterday this is the first time the two of them have seen each other or communicated in any way in the last 6 1/2 years since the death of Kim Porter. Kim Porter, the mother of four of Diddy's children who played a very prominent role in the defense's opening statement yesterday, Sara, to suggest that it was Kim Porter as essentially the person who Cassie compared herself to and realized she could never be and therefore, was enraged with jealousy. And that prompted the civil lawsuit and everything afterwards.

Of course, the prosecution is saying no -- this is somebody who was a domestic abuser. A drug user who used his power, reputation, and influence, and inner circle and enterprise to force them into have sex that was nonconsensual for money or for some received service or benefit.

This is going to be an incredible day today in court. Cassie, I note, is pregnant -- almost due with her third child. You can imagine the dynamic at play to have her enter the courtroom as somebody who is visibly pregnant.

How will the defense treat her on cross? How will the prosecution address her and beyond? This is going to be an incredible day for this trial.

SIDNER: Yes.

I do want to talk to you about what we heard from the defense though because they did admit to the domestic violence. Hard to ignore that it is on camera and Diddy paid money to Cassie Ventura in a -- in the civil suit. But they do say look, this isn't racketeering. This isn't sex trafficking.

What do you think about the strategy that the defense is using?

COATES: Well, the strategy for the defense is you have to admit what you can't deny and deny what you don't want to admit. That's exactly what they did. They said we will own the domestic violence. You're not going to like him. You won't like the way he behaves. He has a violent and bad temper especially when he uses bad drugs.

Their entire premise was he may be all of those things -- drug user, domestic abuser -- but he's not charged with domestic abuse. There's not a separate assault allegation or a drug charge. And the prosecution is going to have a very hard time, the defense believes, trying to bridge that gap. He may be a domestic abuser but he's not a trafficker or a racketeer.

Now, that is the only real strategy they can use here to try to address that very critical video. But for the prosecution they're looking at the video as one of the key pieces of evidence to show that she was trying to get away from these so-called "freak offs." That she was trying to escape his possession in that moment and tried to leave and was dragged back as we saw.

And there's a moment here though this video is going to play, particularly in this testimony. I was surprised yesterday -- the frequency and the initial use of that video. They didn't play it just one time, they played it at least eight or nine times, stopping and starting, to make sure this jury was really invested.

And Sara, when I was watching those jurors very carefully, I wanted to see how were they reacting, and they were. They were paying attention. They were leaned in. It was an incredible sight to see.

SIDNER: Yeah. I mean, it is important that you're getting this view of the jury. You're getting the view the public can't see on television. But you are getting to see their reactions and that's very important too. And you know very well the prosecutors and the defense both watching the jury as well -- how they're taking in all of this information.

Laura Coates --

COATES: Yes.

SIDNER: -- thank you so much for being there and for giving us these great reports. Appreciate it -- Kate.

BOLDUAN: Focusing in today on just a devastating blow for the Celtics. Star forward Jayson Tatum down with a leg injury in game for last night against the New York Knicks.

CNN's Andy Scholes is following this one. Andy, what's happening -- what happened, and how is he doing? What are you hearing?

ANDY SCHOLES, CNN SPORTS ANCHOR: Well, Kate, Celtics head coach Joe Mazzulla said after the game last night Tatum would under an MRI today, and the team has not provided any further updates since then. But, I mean, as you mentioned, just a devastating blow to the Celtics.

Tatum was having an epic Madison Square Garden performance with 42 points in game four, but right here in the fourth quarter he's going to lunge for this ball. He goes down immediately, and you can tell by his reaction he knew it was serious. Tatum was helped off. He was eventually in wheelchair then in the back. The fear is that he has ruptured his Achilles.

And here was Tatum's teammates after the game on his injury.

(BEGIN VIDEO CLIP)

JAYLEN BROWN, GUARD, BOSTON CELTICS: Tonight is tough. I think everybody's kind of at a loss for words just because, like, one losing the game, but obviously the concern with J.T.

DERRICK WHITE, GUARD, BOSTON CELTICS: That's our brother and we hated to see him go down. And, like, we just know the type of guy he is. And it was just tough to see him go down.

(END VIDEO CLIP)

[07:45:08]

SCHOLES: Yeah. The Celtics now down 3-1 in this series and it appears they'll be without Tatum the rest of the way.

But Jalen Brunson -- he was once again just fabulous for the Knicks. He scored 39 points in front of a rocking crowd there at MSG.

The Knicks won the game 121-113 and they can now punch their ticket to the Eastern Conference Finals for the first time in 25 years on Wednesday.

The Timberwolves, meanwhile -- they're also on the brink of the conference finals. Anthony Edward and Julius Randle -- they combined to score 61 points. Minnesota beat Golden State 117-110.

The Warriors season will now be on the line in game five and Steph Curry still expected to miss that one with his injured hamstring.

All right, and finally, the Dallas Mavericks shocking the world winning the draft lottery and the right to select Duke star Cooper Flagg last night. The Mavs had just a 1.8 percent chance of getting the first overall pick. It's the fourth-lowest odds by a team to win the lottery. Dallas jumps 10 spots, which is also the biggest move by a team in lottery history.

And, you know, Mavs general manager Nico Harrison -- he's been under fire since trading Luka Doncic. Well, he was going crazy here along with the rest of the Mavs brass after they won.

But Kate, the conspiracy theorists are all out right now because the --

BOLDUAN: Ooh.

SCHOLES: -- joke ahead of this was oh, the Mavs are going to end up winning the lottery now that they traded Luka to the Lakers. And then it ended up happening with them having a less than --

BOLDUAN: I see.

SCHOLES: -- a two percent chance. But hey, congrats to those Dallas fans because they have had a rough few months after that trade.

BOLDUAN: I mean, I -- this is the only realm that I'm cool with conspiracy theories, OK. This is the only realm, I would like the record to show. But that is -- that's fun. I want -- I want any reason to have to jump up from a table like they did though.

BERMAN: Things always have this weird way of working out like this in the NBA.

BOLDUAN: Fascinating. BERMAN: Just saying -- hmm.

BOLDUAN: I mean, we are really, really stoking it today. Lots of --

SCHOLES: There's been lots of questions about the draft lottery.

BOLDUAN: This is not CNN reporting.

SCHOLES: No.

BOLDUAN: We don't know anything. We're just having fun. Have I couched it enough?

BERMAN: It's a disclaimer. That's a disclaimer.

BOLDUAN: Done.

BERMAN: Exactly.

BOLDUAN: Saved us all again.

BERMAN: Yeah.

BOLDUAN: Thanks, Andy.

BERMAN: Please talk to your doctors. All right. This morning President Trump insists his plans to accept a $400 million luxury jet from the Qatari royal family to use as Air Force One is all on the up and up. He says it is not a gift to him but to the Pentagon. But what does the Constitution say about all of this?

CNN's Tom Foreman has the latest.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voiceover): The possibility of a $400 million gift jet from Qatar to serve as President Trump's new Air Force One is drawing lightning strikes of criticism. Trump's latest grift -- "It's not just bribery; it's premium foreign influence with extra leg room."

And from the vice chair of the Senate Ethics Committee --

SEN. CHRIS COONS (D-DE), VICE CHAIR, SELECT COMMITTEE ON ETHICS: This is almost exactly the sort of gift that our founders had in mind that Americans shouldn't accept. And I'll remind you, other federal employees can't accept even $50.

FOREMAN (voiceover): The plane would appear to fly in the face of the U.S. Constitution's emoluments clause, which says no person holding any office shall without the consent of Congress, accept of any present of any kind, whatever from any king, prince or foreign state.

Asked about that, Trump hit back.

DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: It's not a gift to me. It's a gift to the Department of Defense.

FOREMAN (voiceover): Analysts say the gift plane would likely have to be entirely stripped down and rebuilt to make sure it does not hold technology detrimental to presidential security. After all, Qatar has long ties to Hamas, a terrorist group in the eyes of the U.S. government.

TRUMP: The nation of Qatar, unfortunately, has historically been a funder of terrorism at a very high level.

RICHARD PAINTER, FORMER WHITE HOUSE ETHICS LAWYER UNDER GEORGE W. BUSH: Why is the United States of America accepting a gift of this magnitude from a foreign government that supported terrorist organizations?

FOREMAN (voiceover): In his first term, Trump hit upon the idea of revamping Air Force One -- upgrading it, changing the color.

TRUMP: You know what colors we're using? Take a guess.

UNIDENTIFIED MALE: Red, white and blue.

TRUMP: Red, white and blue.

FOREMAN (voiceover): He became frustrated by the long, expensive process of doing all that. But now, Qatar has offered him a quick fix, and he's on board.

TRUMP: I would never be one to turn down that kind of an offer. I mean, I could be a stupid person and say, no, we don't want a free, very expensive airplane.

(END VIDEOTAPE)

SIDNER: All right. Our thanks to our reporters there.

Coming up, a brand is morning -- brand this morning, former President Biden's closest advisers reportedly discussed the possibility of him using a wheelchair if he were elected to a second term. We've got more on the details there.

[07:50:00]

And several train lines in Baltimore shut down after a massive seven- alarm fire broke out at a warehouse near a rail station. You can see all the people out there watching what's happening.

Those stories and more ahead.

(COMMERCIAL)

[07:55:00]

BOLDUAN: Several train lines out of Baltimore have been canceled today after a massive fire broke out at a mattress warehouse actually. A -- it was a seven-alarm fire that began Monday night and just grew out of control. Luckily the warehouse was vacant at the time, but it is located near train tracks in a residential area and that's what caused Amtrak to pause service between Baltimore and D.C. Thirty people living in the area were told to evacuate as more than 200 firefighters responded to fight the blaze.

Also this morning an investigation is underway after a semitruck carrying 10,000 gallons of crude oil slammed into a home in Utah. It happened early Monday in Wellington, which is about 120 miles from Salt Lake City. Troopers say the driver ran off the road, hit several parked cars, a utility pole, and a fire hydrant before crashing into the house. A couple was inside, and they were hurt. Their 12-year-old grandson was there as well. He was not harmed. Authorities believe that the driver may have fallen asleep at the wheel.

And rapper Tory Lanez is recovering after repeatedly stabbed in the California prison where he's serving a 10-year sentence for shooting hip-hop star Megan Thee Stallion. A prison spokesperson says Lanez was rushed to the hospital after yesterday morning's attack. A post on his verified social media said that he was stabbed 14 times and both of his lungs collapsed. That same post says he's in pain, but he is in good spirits and "pulling through."

Hmm -- Sara.

SIDNER: All right. New this morning President Biden's closest advisers privately discussed the possibility that he made need to use a wheelchair if he won re-election because his physical health had deteriorated so much. That scoop out this morning from Axios.

It's one of the many details in the soon-to-be-released new book titled "Original Sin: President Biden's Decline, It's Cover-up, and His Disastrous Choice to Run Again." It was written by Axios' Alex Thompson and CNN's own Jake Tapper.

Jake is here to join us now. I'm curious about what his advisers were saying at the time as you look at this -- as you reported out this book.

JAKE TAPPER, CNN ANCHOR AND CHIEF WASHINGTON CORRESPONDENT, CO-AUTHOR, ORIGINAL SIN: PRESIDENT BIDEN'S DECLINE, IT'S COVER-UP, AND HIS DISASTROUS CHOICE TO RUN AGAIN": Sara, the White House physician, Dr. Kevin O'Conner, was telling White House aides that President Biden's deterioration of his spine -- the degeneration -- was so significant that if he fell one more time that he might have to be in a wheelchair and serve in a wheelchair for his second term. But everybody pushed off the notion that he'd used a wheelchair until after the election.

This is all part of a larger whole where the Biden White House tried to hide the extent of his deterioration, both physical and cognitive, as much as possible. In fact, as you -- we all know and we all saw as his shuffling gait got worse and worse from 2003 to 2004, they started putting aides around him as he walked to Marine One, the helicopter. That was to kind of hide from public view how bad his gait was and how bad his walking was -- his shuffling -- and also in case he stumbled again to make sure somebody was there. And this is just of a piece of an overall campaign to try to conceal from the American people the extent to which the president was really struggling to do his job.

SIDNER: You have an entire White House Press Corps though following him around. And I'm just curious as to whether or not this kind of trying to hide what was happening with the president at the time had an impact on the Press Corps. I'm, like, why didn't we hear some of these details from what they actually saw and were dealing with trying to get information?

TAPPER: Well, Alex Thompson and I were on the case, as were lots of other reporters, trying to figure out what was going on behind the scenes. But the bottom line is the White House was lying not only to the press, not only to the public, but they were lying to members of their own cabinet. They were lying to White House staffers. They were lying to Democratic members of Congress, to donors about how bad things had gotten.

And, in fact, Alex and I started writing this book after the election of 2024 and we spoke with more than 200 people, most of whom -- almost all of whom were Democrats and almost all of whom wouldn't be honest with us or wouldn't be candid with us until after the election.

And then after the election we found out all of these things that when you looked at what was going on with President Biden at the time it probably doesn't surprise you the extent to which he was deteriorating. But now we have anecdotes and facts about what was really going on behind the scenes with details that Democrats wouldn't share with us until after Election Day.

SIDNER: Are you hearing anything from President Biden himself about any of this? Is he responding to any of this?

TAPPER: So he was on "THE VIEW" last week and Alyssa Farah Griffin, one of our commentators and also obviously a host there, asked him about our book specifically -- she said to us later it was about our bool -- about the fact that sources were saying these things about him behind closed doors and are they wrong.