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Possible Trade Wars Between the U.S., Canada, Mexico and China; European Union Threatened with Tariffs by Trump; Netanyahu Visits Washington for Ceasefire Talks; Trump Wants Control of Panama Canal; U.S. & Panama Discuss China's Presence Around Panama Canal; Soon: Efforts To Clear Wreckage Begin, A Dozen Still Missing; Beyonce's "Cowboy Carter" Wins Big At The Grammys. Aired 2-2:45a ET

Aired February 03, 2025 - 02:00   ET

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


[02:00:00]

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ROSEMARY CHURCH, CNN HOST: Hello and welcome to our viewers joining us from all around the world and everyone streaming us on CNN Max. I'm Rosemary Church. Just ahead, global markets take a tumble as Donald Trump's tariffs are set to take effect. The United States' biggest trading partners are promising to fight back.

Israel's Prime Minister is in the U.S., the first foreign leader to meet with President Trump since his inauguration.

And Beyonce wins big and makes history at the Grammys 25 years after her first nomination.

Good to have you with us. Well, the clock is counting down to the moment when U.S. President Donald Trump's sweeping tariffs roll into effect at midnight Tuesday. It's a move that has rattled global markets. Stocks in Asia have tumbled and U.S. futures are down sharply as well. Canada, Mexico, and China are all fighting back with countermeasures of their own.

President Trump says he will speak with Canadian Prime Minister Justin Trudeau as well as officials from Mexico in the coming hours, but he doesn't expect anything dramatic to come out of those conversations.

And U.S. companies are bracing for a rise in prices that are expected to trickle down to American consumers. President Trump told reporters why he thinks these tariffs are necessary.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: We may have short term, some little pain and people understand that. But long term, the United States has been ripped off by virtually every country in the world. We have deficits with almost every country, not every country, but almost. And we're going to change it. It's been unfair. That's why we owe $36 trillion. We have deficits with everybody. We help everybody. We've been helping everybody for years. And to be honest, I don't think they appreciate it. So we're going to change that. We're going to change it fast.

(END VIDEO CLIP)

CHURCH: CNN's Alayna Treene has more on how American households will likely bear the brunt of these tariffs.

ALAYNA TREENE, CNN REPORTER: Well, just one day after citing steep tariffs on Mexico, Canada and China, President Donald Trump acknowledged what many economists, people on Capitol Hill and even some of his own advisors in their previous lives, I should note, have been warning all along, which is that Americans may feel the impact of these tariffs on their wallets.

This is what Donald Trump posted on True Social earlier Sunday morning. He said, quote, "This will be the golden age of America. Will there be some pain? Yes, maybe and maybe not, but we will make America great again and it will all be worth the price that must be paid." Now, really, that last line there I think is the most notable. He says it will be worth the price that is paid. This is really a warning to a lot of Americans.

One is that the president is very serious about wanting to stop the stem of migrants, undocumented migrants I should say, and drugs, specifically fentanyl, from coming into the United States. But he also -- he's warning that, you know, doing so may be uncomfortable or even worse for many Americans who are already contending with the high cost of living. Now one thing that's still unclear is when some of these higher prices or the impact of these tariffs might start to be felt.

We know that they are slated to go into effect on Tuesday, beginning at 12:01 a.m. And another thing that's still unanswered right now is if there is an off ramp. We know that some of these other countries, Canada, Mexico, China, all of them have tried to see if there is any sort of resolution that they have could have reached or kind of convinced the Trump administration in order to back away from these tariffs.

But we heard the president himself say on Friday that there weren't any concessions that he believed they could make at this point. And on a briefing call with reporters on Saturday evening, White House officials also declined to lay out specific benchmarks that Canada or Mexico could reach in tightening their borders or curbing fentanyl flows that would allow the tariffs to be lifted.

We also know that in the fine print of these tariffs that Donald Trump signed on Saturday, it does have a retaliation clause that means that he could perhaps raise these tariffs even further if he believes that these countries are responding in a way that he doesn't necessarily agree with. Alayna Treene, CNN, West Palm Beach, Florida.

CHURCH: Canada is fighting back and hitting the U.S. where it hurts. On Sunday, Canada unveiled a full list of goods imported from the U.S. into Canada, which would be tariffed.

[02:05:03] As a key supplier of oil, cement, wood and paper to the U.S., America's gas prices and the housing market could see a major impact in the weeks ahead. The overall response from Canadians to the tariff threats has been hopeful but resolute in defiance.

(BEGIN VIDEO CLIP)

CHRYSTIA FREELAND, FORMER CANADIAN DEPUTY PRIME MINISTER: The president has decided now to make gas in the United States more expensive. He's decided to make groceries in the United States more expensive. And our retaliation is going to cost Americans jobs. That is completely ridiculous. We do not want to do this. And the right thing for Americans to do right now is to kind of shake their heads and say, guys, the Canadians actually are great partners. They're great neighbors. We don't want to have this fight, but we are not going to lose it.

(END VIDEO CLIP)

CHURCH: Mexico is the largest supplier of fruits and vegetables to the United States. And in the coming hours, the country is expected to reveal the details of its own retaliatory tariffs on goods from the U.S. The Mexican president has previously said the plan would include both tariff and non-tariff measures. Meanwhile, Claudia Sheinbaum is rejecting the Trump administration's accusation that her government has ties to drug cartels.

She says the U.S. has done little to fight drug trafficking, but amid the escalating trade conflict, she acknowledges that problems need to be addressed through cooperation.

(BEGIN VIDEO CLIP)

CLAUDIA SHEINBAUM, PRESIDENT OF MEXICO (through translation): Mexico does not want confrontation. We start with collaboration between neighboring countries. Not only does Mexico not want fentanyl to reach the United States, but we do not want it to go anywhere. Therefore, if the United States wants to combat criminal groups and wants us to do so together, we must work in an integrated manner.

(END VIDEO CLIP)

CHURCH: Meanwhile, officials in China are also promising countermeasures over these U.S. tariffs, but it's not yet clear what those measures will be. President Trump is now also threatening to enact additional tariffs on the European Union. He accused the E.U. of being out of line.

(BEGIN VIDEO CLIP)

TRUMP: With the European Union, it's a $350 billion deficit. So obviously something's going to take place there. I wouldn't say there's a timeline, but it's going to be pretty soon.

(END VIDEO CLIP)

CHURCH: Meantime, German Chancellor Olaf Scholz is calling for unity for global economic prosperity.

OLAF SCHOLZ, GERMAN CHANCELLOR (through translation): Globalization, the worldwide exchange of goods and commodities, has proven to be a great success story that has created prosperity for us all, in the U.K., in Germany, in the USA, but also in many other parts of the world. That's why it's important that we don't divide up the world now with a lot of customs barriers, but that we also make this exchange of goods and services possible for the future.

(END VIDEO CLIP)

CHURCH: Matthew Karnitschnig, editor-in-chief of Euractiv, joins me now from Brussels. Good to talk with you.

MATTHEW KARNITSCHNIG, EDITOR-IN-CHIEF, AURACTIV: Thanks for having me.

CHURCH: So, U.S. President Donald Trump just announced tariffs for Canada, Mexico and China. And the European Union could be next, with Trump threatening in recent days to enact additional tariffs on the E.U. What's been the reaction so far to that looming threat?

KARNITSCHNIG: Well, I think people are very nervous about it and they are reluctant here in Brussels and I think across Europe and the major capitals to do anything that would provoke Trump further because they do have this trade surplus with the United States, which means that they are very dependent on the U.S. as an export market. In fact, the U.S. is the largest trading partner now overall for the European Union. So they really have a huge amount at stake here in these negotiations with Trump.

CHURCH: And so how will the E.U. likely respond, do you think, to Donald Trump's tariffs once they come into effect?

KARNITSCHNIG: Well, looking at what happened the last time around, they responded in kind. There is definitely a tit-for-tat strategy in these situations as we're also seeing in Mexico and Canada, as we just heard. But it's not what anybody really wants because of the economic damage that it would do to the European economy, which is already struggling.

And this is something that I think people are very worried about. We heard a little bit there. about unemployment potentially rising in the United States. The European economy is much more fragile right now, especially in places like Germany and France.

CHURCH: Yeah, let's take a closer look at that. I want to get an idea from you what a trade war between the United States and the E.U. would look like potentially.

[02:10:05]

KARNITSCHNIG: Well, I think eventually Europe would have to buckle, to be honest, because Trump just has so much more leverage in this trading relationship. If you look at the German car industry, for example, it's very dependent on the United States. Some of the big German car makers, such as VW and BMW, produce in the United States, but they're really producing as part of a supply chain across North America, including in Mexico especially and in Canada.

So some of the cars that the German car makers are making, if they're made in Mexico, you know, they could still end up facing tariffs. So I think that the Germans in particular are going to be very eager to negotiate here. We're already hearing from big European companies as well that they're thinking about relocating their operations to the United States as a way to avoid the tariffs.

The CEO of LVMH, the big luxury group, Bernard Arnault, said recently last week that he was -- you know, he'd been strongly recommended to start opening workshops in the United States. So I think we're going to see a lot more activity like that, which again, if these companies start relocating to the U.S., that's going to hurt the core of European economy because these jobs are going to go away.

CHURCH: Right. And President Trump claims that the E.U. has treated America terribly, his word, and posted on social media back in December that unless the block buys more American oil and gas it would be tariffs all the way. So the E.U. has had time to plan for this, right? It's had that heads up. How likely is it that the E.U. would buy more U.S. oil and gas?

KARNITSCHNIG: Well, Ursula von der Leyen, the president of the European Commission, has said that the E.U. would be willing to buy more oil and gas, especially more LNG gas, more liquefied natural gas. So there is a willingness on that front. The question is, how much does Europe really need? How much can it buy? And what is the price going to be? So these are, you know, other negotiations here, obviously, that could take some time.

But I don't think that the Europeans will not buy gas if that is the price for keeping this trade relationship on track, because they really bet the farm, as it were, on this relationship with the United States. And I think people are a little bit surprised that after 30 years of hearing from Washington that trade liberalization is the be- all and end-all, now they're being told that they're going to be slapped with tariffs. So, I think a lot of people are not really ready to take this as seriously maybe as they should.

CHURCH: So time perhaps for big negotiations.

KARNITSCHNIG: I think that's inevitable. As we saw yesterday, Trump sort of indicated he's already willing to start negotiating with Mexico and Canada. This is clearly a negotiating tactic to, you know, kind of shoot first, ask questions later, to put these tariffs in place possibly or most likely also against the European Union, and then use that to get people to the negotiating table.

The question is, will we see a massive escalation on the European side in the meantime, and will this kind of just ratchet up until both sides end up being quite damaged by this.

CHURCH: All right, Matthew Karnitschnig, thank you so much for joining us, appreciate it. KARNITSCHNIG: Thank you.

CHURCH: Well, the second phase of ceasefire talks between Israel and Hamas are about to begin. We will explain what's happening and what it means for the conflict, just ahead. You're on "CNN Newsroom."

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CHURCH: The Israeli military blew up several buildings in a West Bank refugee camp on Sunday. The Palestinian news agency says nearly 20 buildings were blown up in Jenin, leaving Palestinian families displaced. Israel's military launched a large-scale operation in the West Bank on the heels of the Gaza ceasefire deal.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu is in Washington right now. In a matter of hours, he will take part in the second phase of the Israel Hamas ceasefire. Netanyahu is scheduled to meet Tuesday with U.S. President Donald Trump in what the Prime Minister says is a very important meeting.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL: I believe that we can strengthen security, broaden the circle of peace and achieve a remarkable era of peace through strength.

(END VIDEO CLIP)

CHURCH: Aaron David Miller is a former State Department Middle East negotiator and a senior fellow with Carnegie Endowment for International Peace. He joins me now. Good to have you with us.

AARON DAVID MILLER, FORMER MIDDLE EAST NEGOTIATOR, U.S. STATE DEPARTMENT: Thanks for having me, Rosemary.

CHURCH: So Israel's Prime Minister Benjamin Netanyahu is set to meet with U.S. President Donald Trump at the White House on Tuesday. What do you expect will come out of that meeting?

MILLER: You know, I think it starts basically with Donald Trump's invitation. He did Netanyahu a big favor, certainly domestically in Israel. Netanyahu's under great stress and pressure, certainly from the public. To invite Netanyahu to Washington to be the first foreign meeting in Donald Trump's second non-consecutive term is a big deal for Netanyahu. And as a consequence, a transactional president is going to want something in return.

[02:20:03]

And I think the key issue on the agenda right now is how to move from phase one of the Israel-Hamas deal, which is actually working surprisingly relatively smoothly, move it to phase two, where big decisions have to be made. And Netanyahu's in a jam. He's trapped between the expectations of a president that doesn't want this deal to crater on his watch and a right wing that's threatening to blow up his government.

So that's the key question, Rosemary, and how it's going to play out. Neither of them want a bad meeting, but how it's going to play out, how much flexibility Netanyahu is prepared to demonstrate, how much pressure Trump's prepared to apply, not yet clear.

CHURCH: And President Trump recently called on Jordan and Egypt to take in Palestinians from Gaza, but those nations have rejected that call, as have Qatar, the United Arab Emirates and Saudi Arabia. What does all this signal to you?

MILLER: You know, it's hard to know whether this is simply Donald Trump is a disruptor. He's been president for four years. He knows the sensibilities and sensitivities with respect to Egypt or Jordan absorbing large numbers of Palestinians, certainly in the wake of October 7 and the Israel-Hamas war politically, very, very hard. So it's hard to know whether this is just a disruption or is it actually tied to some sort of strategy.

King Abdullah of Jordan is due in, I think, next week. And I'm sure he's worried, and so is the Egyptian leader, that the transactional president is going to use American assistance as a leverage to actually get the Jordanians and the Egyptians to absorb what hundreds of thousands of Palestinians and I think it computes in down terms head. I don't think it computes in the region though, Rosemary.

CHURCH: And what happens now to the long-held U.S. goal of a two- state solution?

MILLER: It's a thought experiment on a gap in a galaxy far away. If you had leaders on the Israeli and Palestinian side and an administration in Washington, literally prepared to make this a priority issue, you might envision a pathway being constructed forward, but the reality's back here on planet Earth. No leadership, incredible trauma inflicted on Israel and on the Palestinian population during the last 15 months.

Hard to imagine that you could actually anytime soon make significant progress and get an Israeli and Palestinian leader into a negotiation to resolve the five core issues, border security, refugees and Jerusalem, and then a commitment to end the Israeli-Palestinian conflict, very hard to imagine right now.

CHURCH: And you mentioned at the start of this interview the ceasefire and hostage deal, and you seem o feel that it is doing quite well and better than expected perhaps. And you also mentioned it's moving now to the second phase or will. How well do you think it will move on to that next phase?

MILLER: This is the real problem because phase two calls for the end of the war. It calls for Hamas to release the remaining hostages, roughly 65 IDF soldiers, half of whom the Israelis judge to be dead. And it compels the Israelis, according to the agreement, to withdraw from Gaza. I think it's very hard. Hamas is not going to release those hostages unless there are absolute guarantees that the government of Israel will end the war and withdraw. I don't see anyone providing those guarantees, and I don't see

Benjamin Netanyahu agreeing to withdraw Israeli forces from Gaza without some security architecture, some sort of force. And even then, it's going to be difficult. So again, you know, it is the Holy Land, and miracles have occurred there. This is going to be a very heavy lift.

CHURCH: Aaron David Miller, we'll be watching very closely, of course. Many thanks for joining us. Appreciate it.

MILLER: Thanks for having me.

CHURCH: And closer to home, Trump turns up the pressure on Panama. Just ahead, the latest developments as he sends his top diplomat to reinforce the message that he's not joking about retaking the canal.

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[02:25:00]

CHURCH: Welcome back everyone. The U.S. President issued a warning to Panama just hours after Secretary of State Marco Rubio paid a visit to the Panama Canal. Trump told reporters on Sunday the U.S. is going to retake control of the waterway or quote, "something very powerful is going to happen." Our Patrick Oppmann has the latest details on what's turned out to be a surprising fixation in Trump's foreign policy.

(BEGIN VIDEOTAPE)

PATRICK OPPMANN, CNN CORRESPONDENT: At his first stop on his first trip abroad as Secretary of State, Marco Rubio visited Panama, which has emerged as a surprising point of contention during the second Trump administration as President Donald Trump has claimed without any evidence that the Panama Canal has fallen under Chinese military control.

[02:30:11]

During his trip in Panama, Marco Rubio called on Panama's government to make immediate changes to show that the Panama Canal is not under Chinese control, something that Panama's government has consistently denied.

On Sunday, Panama's President Jose Raul Mulino told Rubio that Panama would no longer take part in the Chinese investment program, the Belt and Road Initiative, which would appear to be a major concession to the U.S.

All the same, though, Rubio and the Trump administration are turning up the pressure on Panama, which of course, has been a longtime U.S. ally. All the same, though, Trump has been fixated on this point, saying that the Panama Canal will once again fall under U.S. control. And for the Panamanian government, there's some sense of frustration of how do they prove that the canal that has been administered now for more than 25 years by Panama is not secretly being controlled by the Chinese. Of course, the U.S. gave back control of Panama in agreement -- in an agreement with that country, almost 50 years ago. And despite the fact that Panama has been helping the U.S. when it comes to immigration, the number of migrants that come through the Darien gap between Colombia and Panama, something that Marco Rubio complimented on Panama, something he said that Panama has been an ally to the United States on very clearly when it comes to this issue of the canal, something that the Trump administration has threatened military action on if they don't see the results of their pushing for.

Very clearly, despite the visit of the secretary of state over the weekend, more diplomacy is needed.

Patrick Oppmann, CNN, Havana.

(END VIDEOTAPE)

ROSEMARY CHURCH, CNN ANCHOR: In a matter of hours, recovery crews will begin clearing the wreckage of Wednesday's fatal mid-air collision over Washington, but they have not found the remains of 12 people presumed killed in that crash. Engineers plan to remove pieces of the jet from the Potomac River before removing the Black Hawk helicopter.

So far, officials have recovered and identified 55 bodies from the crash, but mangled debris has made recovery efforts especially difficult for dive teams.

In the meantime, officials are still waiting for answers into how this happened.

(BEGIN VIDEO CLIP)

SEAN DUFFY, U.S. TRANSPORTATION SECRETARY: What was happening inside the tower? Were they understaffed? Was it a right decision to consolidate the positions of the air traffic controllers from two to one? Those are questions that we need answers to.

And the position of the Black Hawk, the elevation of the Black Hawk, were the pilots of the black hawk wearing night vision goggles? Did it affect their peripheral vision or their perception?

Also, if they did have a night vision goggles on, why are they flying at 9:00 at night when DCA is so busy? They should be flying at 1:00 in the morning. That's information we don't have yet.

(END VIDEO CLIP)

CHURCH: There was a powerful moment on Sunday. Families of victims gathered along the banks of the Potomac near Reagan National Airport to honor their loved ones.

Well, five people remain hospitalized following the medevac plane crash in Philadelphia on Friday. Three are in critical condition. Authorities are working to figure out what caused the crash and now have the cockpit voice recorder to help in their investigation. The crash killed seven people, including the six Mexican nationals on

board the air ambulance. The operator, jet rescue, confirmed the identities of the four deceased crew members pictured here. A child patient and her mother were also killed on the flight, which was bound for Tijuana.

Just ahead on CNN NEWSROOM, music's biggest night hosted some unforgettable performances Sunday. Coming up, the Grammy's star studded ceremony and the Queen Bey's big win.

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[02:38:49]

CHURCH: Beyonce was the big winner at Sunday night's Grammy Awards in Los Angeles.

(BEGIN VIDEO CLIP)

ANNOUNCER: The Grammy goes to -- Cowboy Carter. Beyonce. Beyonce.

(END VIDEO CLIP)

CHURCH: Despite being nominated several other times, this was her first win for album of the year. Beyonce also became the first black woman to win the Grammy for best country album. While accepting that award, she had a message for all artists.

(BEGIN VIDEO CLIP)

BEYONCE, WINNER, ALBUM OF THE YEAR AND BEST COUNTRY ALBUM: Wow, I really was not expecting this. Wow. I want to thank God. Oh my God, that I'm able to still do what I love after so many years. I think sometimes genre is a cold word to keep us in our place as artists. And I just want to encourage people to do what they're passionate about.

(END VIDEO CLIP)

CHURCH: Kendrick Lamar was also a big winner with his top charting track, "Not Like Us".

[02:40:01]

He swept all the categories he was nominated in, taking home Song of the Year, Record of the Year, and Best Music Video. During Sunday night's program, the Grammys honored emergency workers and highlighted fundraisers for wildfire relief.

Well, the University of Iowa is honoring former star player Caitlin Clark by retiring her number 22 jersey. The ceremony recognized Clark for her historic achievements at Iowa, including becoming college basketball's all time leading scorer. Her return to the school comes just as Iowa defeated fourth ranked USC 76 to 69, handing the Trojans just their second loss of the season.

Now, Clark is making waves in the WNBA, recently being named the 2024 Rookie of the Year. Well done.

Thanks so much for joining us. I'm Rosemary Church.

WORLD SPORT is coming up next. Then, I'll be back in about 15 minutes with more CNN NEWSROOM. Do stick around.

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