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Trump Special Envoy Visits Gaza; Government Moves Ghislaine Maxwell to Minimum Security Prison; Weak Jobs Report. Aired 1-1:30p ET

Aired August 01, 2025 - 13:00   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: A double whammy for the stock market. As President Donald Trump announces historic new tariffs across the globe, a weak new jobs report is worrying investors, eying potential trouble ahead for the U.S. economy.

BRIANNA KEILAR, CNN HOST: Revisionist history. The Smithsonian removed references to President Trump's two impeachments from an exhibit. The museum now trying to explain its plans for the future, and the White House just weighing in.

And the Presidential Fitness Test that you may have dreaded in school is back, running, crunches, all those push-ups. So can a CNN reporter pass it? Harry Enten took on that challenge.

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

SANCHEZ: We start this afternoon with stocks socked, a lot of red on the screen after an economic one-two punch.

There were signs the president's historic tariff policy may roil markets, but a new jobs report is adding fuel to this fire. We're seeing weaker-than-expected jobs numbers for July, but the most stunning part is that over the last few months there had to be revisions, the monthly totals for May and June tweaked down by more than a quarter-of-a million jobs, 258,000, to be exact.

Let's start off at the White House with CNN's Kevin Liptak.

Kevin, walk us through this new tariff policy.

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes.

And I think it's clear we're now entering a new trade era realized by President Trump. In some ways, these rates are a little lower than many countries had feared, but they are still overall at century highs. And just to tick through exactly what the president has put in place, there is now a 10 percent baseline tariff. That will apply to countries that the U.S. runs a trade surplus with, so places where the U.S. exports more than it imports. And the rates only go up from there. There's a 15 percent tariff on countries where the U.S. runs a mild trade deficit. Certain countries have been able to negotiate their own rates, like the E.U., Japan, a number of other countries in Asia.

In all, there are 26 countries that will have a tariff rate higher than 15 percent. And I just want to take an example of the two U.S. neighbors, Canada and Mexico, as kind of a good illustration of how the president has approached all of this.

In Mexico, the president spoke yesterday to the president, Claudia Sheinbaum, and agreed on a 90-day reprieve to allow some of those heavier tariffs to hold off as they try and negotiate a new trade deal. The president says that his relationship with Sheinbaum is improving and saying that the border causes some unique complications in reaching a trade deal.

Canada has had a much different experience, the president raising the tariff rate on Canada from 25 percent to 35 percent, in part for what he says is a lack of cooperation on trying to curb the flow of fentanyl across the northern border.

And so you see, in those two cases, the vastly different approaches and vastly different fates that these countries have reached as they try and navigate this trade war. Of course, the question also is whether this is the final word. We have seen President Trump in the past flexible on some of these rates.

That is certainly possible in the week between now and when these tariffs will go into effect next Thursday. What is clear, I think, is that we are now in a vastly new trade era.

SANCHEZ: Kevin Liptak, live for us at the White House, thank you so much.

Let's go to CNN's Matt Egan now for more on these jobs numbers.

Matt, at one point today, the S&P 500 was on track for its worst day since May. Where do things stand right now?

MATT EGAN, CNN SENIOR REPORTER: Well, Boris, look, the job market, it's been so resilient for so long, but all of a sudden it looks like it's stalling out.

That is a big deal and that is concerning investors on Wall Street. Let me run you through some of the key numbers here. We learned today that the U.S. economy added 73,000 jobs in July. Now, that was weaker than expected. The unemployment rate went up from 4.1 to 4.2 percent. That's still pretty low, but it's moving in the wrong direction.

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But what's really alarmed economists is the fact that, during the months of May and June, the U.S. economy added almost no jobs at all. As you mentioned, there were these massive downward revisions showing that the economy added about a quarter-of-a-million fewer jobs than we previously knew.

In fact, when you look here at the three-month average -- economists like to take an average to smooth out some of the volatility -- well, this is the weakest three-month stretch since June of 2020 during the COVID-19 pandemic.

Now, when we look at some of the sectors here, the good news is, health care, social assistance continues to add jobs, 73,000. I think the bad news is that really accounts for the most, if not all of the jobs added last month. We saw a slowdown in leisure and hospitality and job loss and information, manufacturing and professional services.

I think the bottom line here is, the job market is suddenly flashing yellow lights.

SANCHEZ: Yes, that's a good point.

And, Matt, when it comes to these new tariffs, what are the big takeaways for American consumers?

EGAN: Yes.

Well, look, the president is on this mission to reshape global trade. As Kevin just noted, we have a 10 percent tariff on countries that the U.S. has a trade surplus with. That's the minimum, 15 percent tariff on countries that the U.S. has a trade deficit with.

And then we have all these other countries that have a higher than 15 percent rate. Some of them that we will call out, Taiwan, 20 percent, India, 25 percent, 30 percent for South Africa, 35 percent for Canada. Those are for goods that are not compliant with the USMCA trade agreement, Switzerland and Syria as well significantly higher tariffs.

Now, remember, these are taxes on imports. So, by definition, it means it's more expensive to have these goods, goods from these countries, imported into the United States. Now, some countries, they have reached trade framework agreements with the United States.

But let's just remember, these are not legally binding agreements. These are not text-heavy documents. These are loosely defined agreements. And even those countries, they face high tariffs as well.

So, look, Boris, I think, at the end of the day here, this is unprecedented, right? I mean, we're talking about the highest tariff levels in the United States in nearly a century, since the 1930s, during Smoot-Hawley, the tariff law that made the Great Depression worse.

And there's just a lot of uncertainty. We don't know what's going to happen next, but we do know the U.S. economy is weaker than we realized just a few days ago.

SANCHEZ: Matt Egan, thanks so much for walking us through those numbers and the implications -- Brianna. KEILAR: Joining us now is Scott Lincicome, vice president of general

economics and trade at the Cato Institute.

Scott, looking forward here, what is the effect of these tariffs going to be?

SCOTT LINCICOME, VICE PRESIDENT OF GENERAL ECONOMICS, CATO INSTITUTE: Well, I think that we should expect more of the same. The data that we have seen this week, on Wednesday, we had slower growth, if you X out some of the trade distortions in there.

Thursday, we saw higher goods prices in the personal consumption expenditures and slower consumer spending. And then, today, we had really soft jobs data, particularly those revisions. And now we have announced late last night more tariffs being added and, importantly, still tons of uncertainty about how all of this shakes out.

The White House keeps saying, oh, August 1, that's our deadline. And then a few minutes later, yes, no, we're continuing to negotiate with China and Mexico and others as well. All of that is going to weigh on the real economy in ways that I think most economists expect in terms of growth and jobs and prices.

KEILAR: So these jobs numbers, low employment growth in the last month, and May and June revised down significantly to almost no monthly net job gains. Here's how the White House explained it earlier.

Let's listen.

(BEGIN VIDEO CLIP)

STEPHEN MIRAN, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: About 40 percent of that is due to seasonal adjustment quirks around teachers. Some of it is due to declining foreign-born employment. Finally, there's the uncertainty, right?

Don't forget, we're in the midst of restructuring the global trading system in a way that hasn't been done in decades.

(END VIDEO CLIP)

KEILAR: What do you think about that assessment?

LINCICOME: Well, I agree with the uncertainty point.

The only issue is that it's the White House that's causing all of that uncertainty and it's persisting as we speak. If you listen to companies on the ground, they are paying billions of dollars in additional taxes in the form of tariffs. They are not seeing consumer demand where they want, and they just can't plan for the future. So that means less hiring and less investment.

And we're seeing that again in the economic data. And, quite frankly, the only way this stuff really goes away -- because it is just unilateral executive tariffs with no -- nothing in writing, nothing from Congress really setting this into law, the uncertainty is going to continue.

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And the only way it goes away is that they just cancel the tariffs. But good luck with that.

KEILAR: The black unemployment numbers that we're seeing are pretty alarming, 7.2 percent in these latest jobs numbers. We have now seen sharp rises for the past two months. That can be seen as a harbinger of problems for the general population. It almost always proceeds a trend with the general population.

Are you keeping an eye on that? Are you concerned about that number?

LINCICOME: Well, I'm concerned about that.

I'm concerned about continued weakness in almost everywhere except education and health care. That's really been the only area we have seen significant job gains in the last six months. And it's those things that tell me that this is not an economy that's firing on all cylinders.

It's really because that type of job growth is not cyclical. It doesn't really depend on the strength of the economy. That's telling us that, in things like manufacturing and professional services and leisure and hospitality, in a lot of these areas where there are millions of American jobs, things are just not great out there.

KEILAR: All right, very important to be looking at those specific trends.

Scott, thanks so much for taking us through that.

LINCICOME: My pleasure.

KEILAR: CNN has learned that Jeffrey Epstein's convicted accomplice, Ghislaine Maxwell, has been moved to a new prison. Maxwell has been serving a 20-year prison sentence in Florida. She's now headed to a minimum security prison in Texas.

SANCHEZ: CNN's Katelyn Polantz joins us now.

So, Katelyn, talk to us about this new prison that she's going to and why she's being moved.

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: Why is going to be the question here definitely today.

But we do know from the Bureau of Prisons, they have confirmed through a spokesperson that Ghislaine Maxwell was moved from a federal prison camp in Tallahassee, Florida, to a low-security prison in Bryan, Texas. So that's Northeast of Austin. The difference there? It doesn't sound that much different, minimum security, low security, but it actually is pretty different.

A camp, where she was before, people moved about freely, there are nonviolent offenders -- or -- I'm sorry. Where she was before, there are very likely to be violent offenders, gang members, the risk is higher. And where she is now, that would be white-collar offenders, people who would not be considered to have as much risk as they would have had at places like where she was in Florida.

Two people at the prison that she is now in Bryan, Texas, two women, you may have heard of them before, Elizabeth Holmes from the company Theranos, and then Jen Shah from the TV show "The Real Housewives of Salt Lake City."

Those are the types of women, nonviolent, white-collar offenders, where Ghislaine Maxwell is now. But you asked why. The Justice Department, the Bureau of Prisons is not telling us the reason for this move, but I did speak to a prison consultant just a few minutes ago who was saying that, from her perspective, this is quite good. It would be something that she would want.

KEILAR: From Maxwell's perspective.

POLANTZ: From Maxwell's perspective. It's more comfortable at the camp -- or where she is in Texas, the camp.

But from the Justice Department's perspective, she was speaking to the deputy attorney general just a couple weeks ago. That signals she may be a cooperator, and that puts her at a higher risk when there are people around her who may be potentially more violent as the inmates.

So it may be one of the security decisions, but there also could be the possibility of some leniency happening here.

KEILAR: Really interesting.

Katelyn, thank you so much for that.

Still ahead: President Trump says he's working on a plan to get people fed in Gaza, the president's remarks coming as two Trump administration officials get a firsthand look at the situation there.

SANCHEZ: Plus, the Smithsonian removing a board that references President Trump's impeachments from an exhibit on the American presidency. We will tell you the museum's reasoning behind the move.

And Justin Timberlake opening up after being diagnosed with Lyme disease. Here why he calls it debilitating -- when we come back.

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SANCHEZ: Today, Trump administration officials went into Gaza to visit food distribution sites and report back to the president amid growing international anger over mass starvation in the enclave.

Special envoy Steve Witkoff and Ambassador to Israel Mike Huckabee met with officials with the controversial U.S.- and Israeli-backed Gaza Humanitarian Foundation. Witkoff says he spent over five hours gathering facts and assessing conditions, and Huckabee praised the GHF for delivering 100 million meals to residents since May.

The math there is difficult. That amounts to one meal a day for 47 of the nearly 70 days that GHF has been operating. It's unlikely that the organization has been able to reach all of Gaza's 2.1 million residents, and scenes outside of their aid stations have been chaotic.

The Israeli military has been seen firing towards scores of Palestinians. The U.N. says more than 1,300 Palestinians have been killed trying to access the food.

We're joined now by Frank Lowenstein. He's a former U.S. special envoy for Israeli-Palestinian negotiations.

Frank, thank you so much for being with us.

As Steve Witkoff says that the purpose of the trip is to give the president a clear understanding of the crisis and to plan a -- to create a plan to deliver aid, he didn't really need to go there to accomplish that, did he? Is this purely a play for optics?

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FRANK LOWENSTEIN, FORMER U.S. SPECIAL ENVOY FOR ISRAELI-PALESTINIAN NEGOTIATIONS: Well, listen, I think it's very important that the Trump administration finally seems to be taking this catastrophic humanitarian crisis seriously. The president's talked about starvation, children having not enough food to eat, and really leaned in on this rhetorically in a way, as before.

But just visiting doesn't change anything on the ground. I think there's some optics there that I think are probably positive. But the real question is, what is the United States willing to do, right? Because it's one thing to say that things are going to change, that we're going to have a new plan, that we're going to pressure Netanyahu.

But Bibi does not want humanitarian assistance going in there. His plan is to drive all the Palestinians out of Gaza. So unless Trump is really willing to put some more pressure on him, it's really unclear that this kind of rhetoric is actually going to translate into any positive developments on the ground.

SANCHEZ: It's also notable that Trump said that food should have been getting into Gaza a long time ago. I mean, he seems to at least rhetorically be tacitly criticizing Netanyahu.

But, to your point, should we expect that Trump is going to change his tone to the point that he might actually push Israel to unilaterally end the blockade and try to get a cease-fire?

LOWENSTEIN: Well, I think that there has been a change in the political dynamic here in the United States that might result in the president being willing to put a little more pressure on Netanyahu.

We had Marjorie Taylor Greene call it a genocide. More than half of Democrats voted against arms sales to Israel this week, which is really unprecedented. And I think Trump really got an earful from the European leaders he met with in Scotland this week about the starvation of children on the ground there.

So, yes, I think he's taking it seriously. I think he might have more impetus to push Netanyahu than he has in the past. But, yes, I mean, it's really unclear how much influence he really has. I don't think he wanted the Israelis to attack Iran during his negotiations with them. The Israelis did it anyway.

So we will have to be willing to back up our words with actions and put real punitive measures on the table with the Israelis, I think, if we really expect anything to change on the ground.

SANCHEZ: You mentioned European leaders. France and the U.K. and Canada all have said that they would recognize a Palestinian state.

I wonder, on the other side of this, what incentive there would be for Hamas to then enter cease-fire negotiations if they would secure a version of statehood, apparently without preconditions?

LOWENSTEIN: Yes, it doesn't really make a big difference on the ground recognizing the Palestinians. And I think it's a reflection of a lot of frustration in European countries with the situation in Gaza.

And, also, they wanted to make really a symbolic point about the importance of the two-state solution. But I don't see that as having a huge impact on Hamas' calculus on the ground there. They're trying to negotiate for an end to the war. And Israel wants all the hostages out. The question is, what are the mechanics around that solution, that cease-fire solution?

Is Israel willing to withdraw all of its forces from Gaza? Are they willing to allow an international peacekeeping force to come in there, an interim Palestinian government, as the Egyptians and others have suggested? Because if their long-term intention is really the permanent occupation of Gaza and the implementation of what they see as the Trump plan, I really don't see how you're ever going to get all the rest of those hostages out.

SANCHEZ: Yes, and it's sort of the conundrum at the core of this entire thing. If Israel will not stop until Hamas relinquishes control of Gaza, and Hamas refuses, then what is there but perpetual war?

LOWENSTEIN: Yes, and it's an excellent point.

And I think the United States has shifted its position in the last day. There's reports out of Israel that we now want to move ahead with the Israelis on a final resolution of the war, no more interim cease- fire deals with partial hostage releases, really try to do the whole thing all at once.

And in order to do that, we're going to have to address the issue up front that has really been the cause of the absence of any cease-fire up until now, which is, what is the endgame in Gaza? Because, if it is driving all the Palestinians into the southern third of the country and hoping that they will voluntarily leave, which is effectively a forcible displacement of millions of people, then I don't see any way Hamas is ever going to agree to anything along those lines.

I think it's significant that the Arab League just came out with a statement saying Hamas needed to disarm. That's a new development. It's a really critical part of this. The question will be, how much pressure can they put on Hamas? But they have got to work on Hamas and we have got to work on Israel, because neither side is going to agree to a cease-fire unless they have significant external pressure.

SANCHEZ: Frank Lowenstein, appreciate the expertise. Thanks for joining us.

LOWENSTEIN: Thanks for having me.

SANCHEZ: Still ahead: An interest-free pause on student loan bills has officially come to an end. So, up next, we're going to show you how monthly payments could skyrocket for millions of borrowers.

And running it back. We have new details on President Trump reviving the Presidential Fitness Test.

Stay with CNN NEWS CENTRAL. You will see Harry Enten and his hairy legs doing sit-ups in just moments.

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SANCHEZ: Happening right now: Millions of student loan premiums have just become more expensive.

A Biden era SAVE repayment plan ended today, which means that interest has resumed accruing on loans for some eight million borrowers.

KEILAR: The plan was designed to prevent interest from ballooning and to reduce monthly payments based on income and family size. It also worked to accelerate loan forgiveness for some low-income borrowers.

Now many borrowers are trying to figure out how to adjust for these added costs, which they fear will become unaffordable.

Let's talk about this with George Kamel. He's a personal finance expert and co-host of "The Ramsey Show."

One of the big issues here, George, is that folks didn't have a lot of time to adjust to this, right? They only got a few weeks' notice when this started to kick in.