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Trump's Trade Salvo; Rubio Kicks Off International Trip; Setting A New Record. Aired 3-3:30a ET
Aired February 02, 2025 - 03:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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ISABEL ROSALES, CNN ANCHOR: Hello and welcome to all of our viewers watching from around the world. I'm Isabel Rosales in Atlanta.
Ahead on CNN Newsroom, U.S. President Donald Trump makes good on his word and imposes steep tariffs on Canada, Mexico, and China, setting the stage for what could be a trade war.
Marco Rubio kicks off his first international trip as U.S. secretary of state amid a foreign assistance freeze by the Trump administration.
And a classic car with an impeccable pedigree goes under the hammer. This streamlined Mercedes sets a record.
Mexico, Canada and China, all of them heading back at the U.S. after President Donald Trump imposed aggressive new tariffs on all three countries. He placed a 25 percent tariff on all imports from Mexico and most goods from Canada and a 10 percent duty on Chinese imports. President Trump signed the orders at his Mar-a-Lago club on Saturday, fulfilling a promise he made on the campaign trail.
Several corporations and business groups are lashing out, warning the president that his tariffs will actually make things more expensive for Americans. That could include some of the top imports from Canada, like oil, minerals, cement, wood, and paper goods.
In retaliation, Canadian Prime Minister Justin Trudeau announced his own 25 percent tariffs on U.S. goods. He says they will be, quote, far reaching and include everyday items.
CNN's Paula Newton has more from Ottawa.
PAULA NEWTON, CNN CORRESPONDENT: Canada says it feels like a country targeted and scorned by the United States. The reaction here was visceral, emotional, but also clearheaded about the devastating challenges ahead for the Canadian economy.
And keep in mind, Donald Trump is ripping up an agreement that he signed with Canada in terms of trade. Canada is now coming to terms with the fact that he no longer wants that relationship. Listen.
(BEGIN VIDEO CLIP) JUSTIN TRUDEAU, CANADIAN PRIME MINISTER: I don't think there's a lot of Americans who wake up in the morning saying, Oh, damn Canada. Oh, we should really go after Canada. We're there as friends, as partners. We always have been. We always will be.
Yes, we've had our differences in the past but we've always found a way to get past that. As I've said before, if President Trump wants to usher in a new golden age for the United States, the better path is to partner with Canada, not to punish us.
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NEWTON: And so Canada will retaliate about $155 billion in total Canadian, $30 billion of that will come on Tuesday, the 25 percent tariffs, to match the Trump administration tariffs. The bulk of that though will come in three weeks. Canada saying it wants businesses some time to prepare.
But keep in mind here, this will be a losing battle for everyone in terms of consumers and businesses that now try to adjust and the bottom line is the president himself has said that he will now retaliate because Canada retaliated in turn.
This is the beginning of what could be a very nasty trade war, and it could also rebalance the trade relationship between the United States and so many of its allies.
Paul Newton, CNN, Ottawa.
ROSALES: Tariffs tit-for-tat there. Well, Mexico's President Claudia Sheinbaum says she will implement a plan that includes tariff and nontariff measures against the U.S. But she did not elaborate on what that would involve.
Now, Mexico is America's largest trade partner, exporting $467 billion worth of goods to the U.S. last year. That includes things like fruits, vegetables, steel, beer, and alcohol. President Sheinbaum says Mexico does not want confrontation, adding that the two countries should work together.
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CLAUDIA SHEINBAUM, MEXICAN PRESIDENT: When we negotiate with other nations, when we talk with other nations, always with our heads held high, never bowing our heads. We are equal with all the nations of the world. Mexico is free, independent, and a sovereign country, and that is in the way which we defend Mexicans and our homeland.
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ROSALES: And over in China, officials are now promising countermeasures of their own with these new U.S. tariffs.
For more on China's response, let's go to CNN's Marc Stewart live in Beijing.
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Marc, what are they saying?
MARC STEWART, CNN CORRESPONDENT: Well, Isabel, this idea of countermeasures is a bit puzzling because we don't know exactly what that means. China has said that it will file a complaint with the World Trade Organization, saying that this 10 percent tariff breaks the rules. But beyond that, it's not very clear.
I mean, historically speaking, if we look at how China has handled confrontations like this in the past, it's very much tit-for-tat. You do something to hurt us, we'll do something to hurt you back. But this is a point in time where the Chinese economy is a bit shaky. People haven't been spending as much money. There has been a housing crisis. It's not clear really how much leverage China has in this particular set of circumstances.
It is also dealing with trade issues with Europe being accused of selling cheap E.V.s and cheap solar panels, trying to flood the market with cheap goods to try to win its favor. So, it's got a number of challenges already.
I was talking to one supply chain expert who suggested that China may try to leverage its supply chain, to perhaps create some problems for getting some specific products from China to the U.S. We're just going to have to see. But China has certainly been aware of this potential and it's, in many ways, been planning ahead.
You know, in the past, America, the United States has been a top export nation, but now China is really trying to spread its wings by exporting its products to places such as Latin America, to Africa, even to Russia, to try and diversify its export base. So, it's not so reliant on the United States.
Isabel, we are hoping to ask the government some questions, but right now we are in the midst of the Chinese New Year. We did get the statement because -- we did get the statement perhaps a surprise because it's a holiday, yet we are seeing Canada and Mexico respond. So, exactly what China will do next very much remains to be seen, Isabel.
ROSALES: Right, and you were mentioning there, economists have said, by and large, that this could all backfire, that other countries, like we saw with China, could diversify to not be so reliant on the U.S. But let me ask you about the U.S. consumer. How much of a dent could this have on them?
STEWART: Well, it's interesting. If we look at everyday products that Americans use, we're talking about clothing, we're talking about electronics, we're talking about furniture, and a lot of that comes from China and a lot of American companies like to manufacture items in China. So, for example, we know that fashion can change. A lot of shoes are made in China because it's very easy for the factories here to shift when there's a new color or a new style. So, we do get a lot of merchandise from China. The real question as far as having a dent on the American consumer or an impact on the American consumer, it's how much many of the big stores, like I'm thinking about Walmart, like Target how much they have in their inventory, because that will determine how that will impact prices in the U.S. But China is certainly, you know, a big pipeline of merchandise.
ROSALES: Now, three of these countries seemingly have a lot of leverage too against the U.S. We're going to see how this all plays out. It's certainly going to be messy.
Marc Stewart, thank you.
Matthew Martin is a senior U.S. Economist at Oxford Economics. He joined me earlier and I asked him how the tariff process works and who ultimately pays the price.
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MATTHEW MARTIN, SENIOR U.S. ECONOMIST, OXFORD ECONOMICS: At the moment, the tariff is likely to be hit by those people who are importing the good, whether that's the business of the consumer overall. So, we're talking about 25 percent tariff. Any good we're bringing in from Canada or Mexico, again, whether it's a business or consumer, is going to be the one ultimately playing that 25 percent additional fee.
ROSALES: Yes. And that's the importer. But traditionally that gets passed along to the consumer, to the customer. So, these would be Americans.
MARTIN: Yes, absolutely. So, any businesses, whether that is a grocery store, importing foods or a gas station, importing natural gas, that is going to be an additional 25 percent that you are going to need to pay at the pump or at the grocery store So that business can stay profitable.
ROSALES: Well, even Trump, President Trump, acknowledged the potential for adverse consequences to American consumers. Let's listen in to what he had to say.
DONALD TRUMP, U.S. PRESIDENT: I think there could be some temporary short-term disruption, and people will understand that.
But the tariffs are going to make us very rich and very strong, and we're going to treat other countries very fairly.
ROSALES: And Trump has long praised tariffs as an effective economic policy. I mean, he called tariff the fourth most beautiful word in the dictionary behind God, love, and religion. Do you think, Matthew, this is a good use of tariffs?
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Have you seen it used in this way before? MARTIN: Certainly, this is a new event for all of us and I think it's going to be very much a learning experience for all of us involved, which is why doing independent research is going to be very important. But when using blanket tariffs like this, it's going to be very hard to hide any of these price increases. Consumers, like we've already talked about it, are going to see these show up and hit their wallets almost immediately.
So, in this case -- that quick. And, you know, when we talk about tariffs, at least in an economic sense, they're usually used to protect domestic industries or bring back manufacturing, in this case, back to U.S. soil. However, if we're looking at 25 percent on all goods, it's very unlikely we're going to be able to produce every single one of those on our soil. And that means businesses are going to still need to be sourcing either inputs or these goods from other countries and, again, that's just going to continue to apply disruption to the market, create business uncertainty, and certainly make it harder for consumers.
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ROSALES: Donald Trump's top diplomat is making his international debut. Ahead, details on Secretary of State Marco Rubio's Central American tour and why a recent move by his boss could undermine his efforts.
Plus, the fighting in Gaza may have stopped, but Israel is carrying out deadly strikes in the West Bank. The latest just ahead on CNN Newsroom.
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ROSALES: The Trump administration is making its America First policy known on the international stage. Marco Rubio landed in Panama on Saturday, kicking off his first trip as U.S. secretary of state. He'll also be making stops in El Salvador, Costa Rica, Guatemala, and the Dominican Republic. The tour is meant to drive President Trump's policies forward.
However, some U.S. and aid officials issued warnings about the recent U.S. freeze on foreign assistance.
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They say that could undermine the president's efforts to fight illegal migration and drug trafficking into the U.S.
Eric Farnsworth is vice president with the Americas Society and Council of the Americas. He joins us from McLean, Virginia.
Let's start with the fact that Central America is his inaugural trip as secretary of state. Not only that, but he's visiting each individual leader on their home turf. What does that say?
ERIC FARNSWORTH, V.P., AMERICAS SOCIETY AND COUNIL OF THE AMERICAS: This says two things right off the bat, that Central America and Latin America more broadly is of critical importance to the new administration. I can't remember, and I've been doing this for 35-some years, I can't remember when a U.S. secretary of state would have traveled to Latin America so early in his or her term. This is revolutionary in that context. It really shows the prioritization.
But the second point you raise is also, I think, critically important. Normally, what you would have, and when I was at the State Department and various administrations would do the same thing, you would have the secretary of state travel to the region, maybe to a country like Costa Rica, and then convene all of his or her counterparts for a meeting in one country. It would take a couple hours, and then the secretary would move on to something else.
This is a week-long trip, visiting 5 different countries with the leaders in their home capitals. It really shows, I think, two things. First of all, a sensitivity that Secretary of State Rubio has for the region, but it also shows respect for the leaders themselves in their countries. And so I think from that perspective, it's a really interesting thing that Secretary of State Rubio is doing.
ROSALES: And what do you think are his key outcomes here in visiting these countries? What's he going to talk about?
FARNSWORTH: Well, his mandate clearly is to go and discuss migration issues. That's the prioritization of the Trump administration. He's also looking to discuss, no doubt, the reduction of drug trafficking, fentanyl in particular. But the overriding issue here and the longer term issue is really China, China's presence in the region, China's economic engagement, China's security and intelligence engagement with the region and the idea that the United States can work together with these countries in particular to try to work out some of the -- or unwind some of the Chinese engagements in the region.
I think that's a conversation that many in the region are frankly willing and ready to have. But what they want is they want something from the United States in return. In other words, you can't fight something with nothing. If you want somebody not to have partnership with the country on, say, infrastructure development, that's all well and good. But then you have to provide an alternative, and that's where I think the United States can do better. And, frankly, I think Secretary Rubio, I know that he's very aware of that issue and ready to engage on that front as well.
ROSALES: We've got to talk about the elephant in the room, namely Panama, the Panama Canal, in light of Trump's threats to take back U.S. control over the waterway. What sort of reception do you think the secretary will receive there?
FARNSWORTH: Well, the president of Colombia has already rejected the idea that Panama is going to give up sovereignty of the canal. So, I think Secretary Rubio really has a mission to try to talk through what it is specifically that the president of the United States is looking for. In other words, what can the Panamanians actually do here? What is the issue? Is the issue China? Is the issue migration? Is the issue environmental management of the canal? All of these things have come up. Perhaps there are others as well. You can't ask somebody to fix a problem if they don't know what the problem actually is, or at least how you perceive the problem to be.
So, there's this idea that Secretary Rubio is consummate diplomat. He's worked these issues for a long time. He can go down. He can sit with the Panamanian government and try to understand exactly what it is the Panamanians are supposed to do. And then, of course, it'll be up to them to decide whether or not they want to do that.
Yes, it is a complicated issue. I started my career on Panama issues at the State Department way back long ago, and the U.S. relationship with Panama is varied, it's longstanding, it's historic and it's really symbolic. So this is a top issue. But if anybody can really put the relationship back on sound footing, I think Secretary Rubio probably can do that.
ROSALES: And we certainly heard strong words on the Panamanian side. The president, Jose Raul Mulino, said that everything that Trump has said about the Panama Canal is, quote, false, and also saying the Panama Canal is of Panama's country. It is not a gift.
Listen, Eric, we could talk about this on and on, but that is our time. Thank you so much. I appreciate you coming on the show.
FARNSWORTH: Isabel, it's great to join you, as always.
ROSALES: Israeli strikes in the West Bank area of Jenin have killed five people, including a 16 year old teenager. The Palestinian Health Ministry says three people were killed in one of the strikes and two people in the other.
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The Israeli military says it was targeting, quote, terrorists. Israel launched a military operation in Jenin just days after the ceasefire in Gaza. Since then, at least 20 people have been killed, including a two-year-old girl.
Kyiv and Moscow are trading blame over a deadly strike in the Russian territory currently held by Ukraine. First, a warning, the video you're about to see here is graphic.
Ukraine's president says the video shows Russia's strike on a boarding school in the Kursk region on Saturday. Ukraine says four people were killed and at least four others wounded. But Russia claims it was Ukraine that attacked the school. CNN could not confirm where and how this video was taken.
Investigators are sifting through the debris, trying to piece together what caused Friday's deadly plane crash in Philadelphia. The city's mayor says seven people were killed, including all six people on the plane and one person who was in a car on the ground. At least 19 others were injured there on the ground, but most of them are already out of the hospital.
Investigators are gathering evidence at the scene and looking for the jet's cockpit voice recorder, a critical piece of evidence there. All six people on the medevac plane were Mexican citizens, including a child patient who was headed back home to Tijuana with her mom.
Authorities are providing new details about the deadly midair collision over Washington. We've learned the American Airlines flight may have tried to avert impact with the military helicopter. It appears the pilots tried to pull the aircraft's nose up only seconds before the disaster. Meanwhile, preliminary data indicates a helicopter may have been flying well above the altitude allowed for an aircraft of its type.
None of the 67 people aboard the two aircraft survived. Authorities say 42 bodies have now been recovered and 38 of them have been identified.
We'll be right back.
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ROSALES: A streamlined Mercedes set a record for a Grand Prix car after selling at an R.M. Sotheby's auction Saturday for over $53 million dollars. Wow, take a look at that beaut. Bidding took place at the Mercedes Museum in Stuttgart, Germany. The Streamliner is one of only four complete examples in existence. My goodness.
This vintage classic claimed victory in the 1955 Buenos Aires Grand Prix. It was also driven that same year by Formula One great Stirling Moss. It is the first Mercedes with this iconic body type to become available for private ownership.
Well, the U.K.'s next must-see tourist attraction will take you underground, some 30 meters or nearly 100 feet below Central London, that is. That is according to London Tunnels, the company overseeing the $149 million transformation of the Kingsway Exchange Tunnels. A mile long network of tunnels dug by hand during World War Two to shelter Londoners from the blitz. It later served as the home of Britain's top spies.
The new attraction will be a memorial to the blitz, and that is slated to open by late 2027 or early 2028.
Well, that's it for the show. Thanks for joining us. I'm Isabel Rosales in Atlanta. African Voices is next.
There's more to see here on CNN Newsroom with Kim Brunhuber here in about 30 minutes.
Stick around.
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