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Impact of Trump's Tariffs; Trump is Targeting USAID, an Independent Federal Agency; Trump DOJ Demanding Names of All Who Investigated January 6; Trump Warns U.S. Going to Take Panama Canal Back; Canada, Mexico, China Fight Back Against Trump's Tariffs. Aired 4-4:30a ET
Aired February 03, 2025 - 04:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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UNIDENTIFIED MALE: The tariffs are set to take effect on Tuesday and the impact on American consumers may be deep.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We may have short term some little pain and people understand that.
UNIDENTIFIED FEMALE: President Trump campaigned on overhauling the FBI. He appears to be doing exactly what he said he would do.
UNIDENTIFIED MALE: It's absolutely disgraceful. These are people who are civil servants.
UNIDENTIFIED MALE: Sunday night's Grammy Awards, it was laced with all of his fabled glitz and glamour. Beyonce was and still is the most Grammy winning artist in history.
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ANNOUNCER: Live from London, this is CNN NEWSROOM with Max Foster and Christina Macfarlane.
MAX FOSTER, CNN ANCHOR: Hello and a warm welcome to our viewers joining us from the U.S. and all around the world. I'm Max Foster.
CHRISTINA MACFARLANE, CNN ANCHOR: And I'm Christina Macfarlane. It's Monday February 3rd, 9 a.m. here in London, 4 a.m. in Washington DC where President Donald Trump is expected to speak with Canadian Prime Minister Justin Trudeau as well as officials from Mexico in the coming hours.
FOSTER: Sound tense. With less than a day to go until President Trump's tariffs roll into effect, Canada and Mexico and China are all fighting back with countermeasures of their own. Canada's already implemented its own counter tariffs. Mexico says it'll be unveiling its plan later today. And China says it'll reveal corresponding countermeasures but didn't elaborate. MACFARLANE: Well 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.
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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: 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.
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MACFARLANE: U.S. futures are sharply lower in a sign that investors are worried these sweeping tariffs could spur inflation and be a drag on growth. President Trump is now also threatening to enact additional tariffs on the European Union. He accused the EU of being out of line.
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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.
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FOSTER: German Chancellor Olaf Scholz is calling for unity to ensure global economic prosperity.
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OLAF SCHOLTZ, GERMAN CHANCELLOR (through translator): 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 UK, 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.
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FOSTER: Global markets are reacting to the potential trade war. Already markets in Europe have tumbled. Look at that, just in the first hour of trade.
For more on reactions in China, we'll go now to see there's Marc Stewart in Beijing, because obviously a lot of eyes on China here, the impact that will be there. But every country is now questioning whether they're going to be in a trade war with America. MARC STEWART, CNN CORRESPONDENT: Well, let's just look at the markets for a moment here in Asia. Two of the biggest indexes, the Nikkei in Japan and the Kospi in South Korea, they saw declines of more than 2 percent at the final close today. That is a big number when you look at Asian markets.
And if markets are a reflection of how people are feeling right now, then clearly the answer is not good. The Hang Seng in Hong Kong also saw some declines. Markets here in mainland China are actually closed and will reopen later this week for the Lunar New Year. But these numbers speak volumes about the feeling in this part of the world.
As far as China, though, and its official response, we did get some response from the Ministry of Foreign Affairs over the weekend saying that these tariffs, a trade war, there are no winners in this kind of battle, but did say that it would take necessary countermeasures.
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Now, what those measures are at this point, that's very murky. Certainly, we could see tariffs, additional tariffs in retaliation toward the U.S. from China. But some people will say that's not necessarily going to be the avenue China takes because the Chinese economy is dealing with enough struggles of its own. People aren't spending money. There's a housing crisis.
And let's not forget, as you know, Max and Christina, from being in Europe, the EU and China are facing a lot of trade battles right now over electric vehicles and with solar panels.
So, China could perhaps, at least when it comes to the United States, try to leverage its supply chain because China, in many regards, is seen as the world's factory. So much that the U.S. uses is produced here in China. We're talking about clothing, electronics, furniture. It's a very long list.
Perhaps China could do something to make the U.S. feel the pinch when it comes to controlling what kind of products are exported. But at the same time, China, this is not a big surprise. We knew these Trump tariffs were coming. It's something that was talked about on the campaign trail. And China has been planning ahead, expanding its trade relationships with places such as Latin America, with Africa, even Russia, kind of as a preemptive move.
You mentioned off the top that the leaders of Mexico and Canada, the leadership from those two nations, will be talking to President Trump today. I think it is safe to say, Max and Christina, what comes out of those conversations are going to be of prime interest to the leadership here in Beijing.
MACFARLANE: Yes, plenty of conversations still to come, I think, in the next 24 hours. And we'll be watching China closely. Marc Stewart there, live for us in Beijing. Thanks very much, Marc.
Well Canada is fighting back and hitting the U.S. where it hurts already. As a key supplier of oil, cement and wood to the U.S., America's gas prices and the housing market could see a major impact in the weeks ahead.
FOSTER: On Sunday, Canada unveiled a full list of goods imported from the U.S. into Canada, which would be tariffed. As you can see on your screen, the list is very long. The overall response from Canadians to the tariff threats has been hopeful, but resolute in defiance.
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CHRYSTIA FREELAND, FORMER CANADIAN DEPUTY PRIME MINISTER: We have more leverage than Americans. Canada is the largest market for the United States, larger than China, Japan, the U.K. and France combined. And we know Americans.
We know that for you guys, the customer is always right. We're your biggest customer. Doesn't make a lot of sense to be punching us in the face.
America's tariffs are self-harming. You know, by putting tariffs on the stuff that Canada sells you, you are going to hurt Americans. You have put a tariff, you're putting a tariff on the oil and gas that we sell you. That is going to make prices at the pump, prices at grocery stores, a lot higher.
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FOSTER: Recent polling showing that Americans are worried about the effects of President Trump's tariffs. CNN's Harry Enten breaks down the numbers for you.
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HARRY ENTEN, CNN SENIOR DATA REPORTER: The support is 38 percent. Now, you don't have to be a mathematical genius to figure out that the 51 percent opposed is higher than the 38 percent support. Americans are saying no, no, no when it comes to these Trump tariffs.
You know, there have been some things that Trump has perhaps done in his early days that are popular. I've pointed those out. But this, my dear friend, is not popular at all.
I've looked at a bunch of polling data, some with vague polling language, some with more specifics like this one. And in every single one, the plurality or majority opposed the Trump tariffs. And just this tiny bit right here, 38 percent south of 40 percent support.
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FOSTER: Well, the Trump administration is also targeting USAID, America's Agency for International Development. And now Elon Musk says Donald Trump agrees that it needs to be shut down.
MACFARLANE: Well, this comes after a flurry of speculation that the White House meant to fold the independent federal agency into the State Department, even though Democratic lawmakers say they have no legal authority to do so. CNN's Alex Marquardt has the story.
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ALEX MARQUARDT, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: On Saturday, personnel from DOGE, the Department of Government Efficiency, which was created by Elon Musk, essentially tried to barge into the headquarters of the U.S. government's aid agency, USAID. At first, they weren't allowed in, and they threatened to call the U.S. Marshals Service to force USAID to let them in. Now sources tell CNN that the team from DOGE wanted access to security systems, personnel files, and areas where classified information is held.
A reminder that you need a security clearance to access areas and information like that. Now, eventually, the DOJ team did gain access, and CNN learned on Sunday that the two most senior security officials, the director of security, John Voorhees, and his deputy, were put on leave. This comes after dozens of other top career officials were sent home on leave by the Trump administration amid fears that USAID is being gutted.
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Now, not long after CNN's reporting came out, Elon Musk posted on X, the platform that he owns: USAID is a criminal organization. Time for it to die.
The USAID website went down on Saturday. Its X account was taken offline on Sunday. There's a new page now on the State Department website for USAID, which means it could soon be absorbed by the State Department.
Now, current and former USAID officials have argued to me that USAID must remain independent, that the State Department does not have the expertise, the training, the capacity to handle the kind of work that USAID does. It is the biggest provider of food aid in the world. It has a budget of over $40 billion and works in more than 100 countries in some of the most desperate, difficult, and hard-to-reach places.
Now, this is, without question, a seminal moment for the U.S.'s role in the world, how it helps people well beyond its borders, how it is perceived in the world. And there are warnings of a significant impact on U.S. national security interests.
Alex Marquardt, CNN, Washington.
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MACFARLANE: Now, lawyers for FBI and Justice Department employees are pledging to take legal action if the Trump administration acts against anyone who investigated the January 6th riots. The Trump administration is demanding a list of all bureau employees who helped investigate the Capitol insurrection.
FOSTER: The Justice Department says it wants to quote whether any additional personnel actions are necessary. Former FBI Director -- or Deputy Director, Andrew McCabe is outraged by the administration's actions.
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ANDREW MCCABE, CNN SENIOR LAW ENFORCEMENT ANALYST: It's absolutely disgraceful. These are people who are civil servants. They enjoy the protections of the civil service program.
The FBI has an extensive process of, if there are allegations of misconduct against specific employees, those things are investigated. They are given due process. And ultimately, the Office of Professional Responsibility administers an adjudication.
Nowhere in my entire 21-year history in the FBI did I ever see anything like this, where employees are literally being rounded up for political reasons for cases they did their lawful and expected work on. It's absolutely ridiculous.
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FOSTER: Donald Trump has vowed to strike back at agencies he feels were weaponized against him. On Friday, DOJ leadership fired dozens of prosecutors who worked on January 6th criminal cases.
MACFARLANE: Republican Senator Lindsey Graham says the president has the right to push out senior leaders who don't share his vision, but the purge should not extend to rank-and-file employees.
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SEN. LINDSEY GRAHAM (R-SC): Now, if you're an agent working on a January 6th case or some other case, and you were assigned to do it, you know, you shouldn't be punished just for doing your job.
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FOSTER: Well, the U.S. president issued a warning to Panama just hours after his top diplomat, Marco Rubio, paid a visit to the Panama Canal.
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TRUMP: What they've done is terrible. They violated the agreement. They're not allowed to violate the agreement. China's running the Panama Canal. It was not given to China. It was given to Panama foolishly.
But they violated the agreement, and we're going to take it back or something very powerful is going to happen.
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MACFARLANE: Rubio is in Panama as he launches his inaugural trip as secretary of state. He met with the Panamanian president and discussed the White House's concerns over China's presence around the canal.
FOSTER: Panama's president repeated that sovereignty over the waterway is not up for debate.
(BEGIN VIDEO CLIP) JOSE PAUL MULINO, PANAMANIAN PRESIDENT: There is no doubt that the canal is operated by our country, and it will continue to be so. I do not think there has been a discrepancy in that. The president has his opinion about the Chinese presence, which will be clarified at the appropriate time in the technical instances of the canal.
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FOSTER: But he also seemed to offer a concession that Trump could spin as a victory for his America First agenda.
MACFARLANE: Our Patrick Oppmann has those details.
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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.
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.
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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 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 results that they're 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)
FOSTER: South Africa's president says his government has not confiscated any land. The denial comes as U.S. President Donald Trump pledges to end aid to Africa -- South Africa, over what he says is mistreatment of white farmers.
MACFARLANE: It stems from a new South African law with guidelines for seizing land. It allows the government to seize land that's not being used for development, to generate income, or that is considered abandoned. Before South Africa ended apartheid, racist policies forcefully remove black and non-white South Africans from land for white use. Mr. Trump says the new law is a massive human rights violation.
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TRUMP: Terrible things are happening in South Africa. The leadership is doing some terrible things, horrible things. So that's under investigation right now. We'll make a determination. And until such time as we find out what South Africa is doing, they're taking away land, they're confiscating land, and actually they're doing things that are perhaps far worse than that.
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FOSTER: Recovery crews in Washington are searching for the remains of a dozen people that are presumed killed in Wednesday's deadly midair collision. What's next for the recovery efforts after the break?
MACFARLANE: First, Donald Trump promised to end the war in Ukraine on his first day in office, but Russian airstrikes are still killing civilians. That's ahead.
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MACFARLANE: Now, in a matter of hours, recovery crews will begin clearing the wreckage of Wednesday's fatal mid-air collision over Washington. CNN's Gabe Cohen has more on this.
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GABE COHEN, CNN CORRESPONDENT: Well, we now know dive teams have recovered 55 of the victims in this crash, which means 12 people are still missing in the Potomac River. And so at first light Monday, crews are going to begin a lift operation. They've brought in heavy equipment, including a barge and a crane, and they are going to start cutting into the wreckage and removing it from the water, hoping that it will help them find those 12 remaining people.
Now, as part of that work, if they are able to spot any of those victims in the water, they will stop the operation and send divers into the water to safely and respectfully recover them from the Potomac River. But it will be a heavy lift and it could take days. I asked D.C.'s fire chief who is leading that operation about what he expects in the coming days.
JOHN DONNELLY, CHIEF, WASHINGTON FIRE AND EMS: So it is my belief that we're going to recover everyone. If we knew where they were, we would already have them out. So we have some work to do as this salvage operation goes on, and we will absolutely stay here and search until such point as we have everybody. We believe we're going to be able to recover all of the victims, but no, we don't know where they all are at this point.
COHEN: And we also witnessed a powerful moment Sunday morning when response teams brought family members of the victims in the crash to the end of Runway 33 here at Reagan National Airport to lay a wreath in the water and spend some time at the wreckage site. And the images just speak to the scale of loss from this tragedy. So many families that are grieving right now and searching for answers, as so many of us are as well. This investigation just getting underway.
Gabe Cohen, CNN, Reagan National Airport.
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FOSTER: Five people are being 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 how the cockpit voice recorder to help them in their investigation.
MACFARLANE: Well, 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 just here on your screen. A child patient and her mother were also killed on the flight, which was bound for Tijuana.
FOSTER: Investigators are looking into an engine issue that caused a United Airlines flight to evacuate before takeoff. The plane was scheduled to depart from Houston to New York early on Sunday when a fire broke out. Video from a passenger showing smoke and flames coming from the wing.
No injuries reported and all 104 passengers and five crew members were safely evacuated using slides and stairs. I know these are all isolated cases but so many people on social are talking about flying and the safety of flying.
MACFARLANE: It feels like a lot of them, doesn't it, all coming at once.
Right, still to come more on President Donald Trump's steep tariffs on Mexico, Canada and China and the things that are expected to get even more expensive in the United States.
FOSTER: There's one of them.
Plus, thousands of Venezuelan migrants in the United States have lost their legal status. What's next for them?
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MACFARLANE: Welcome back to CNN NEWSROOM. Here are some of the top stories we're following today.
Lawyers for U.S. Justice Department prosecutors and FBI agents are threatening legal action if the White House moves forward with its dismissal of employees who worked on investigations related to President Donald Trump.
The Trump administration is looking to potentially purge law enforcement officials who worked on probes surrounding the president as well as the Capitol insurrection.
Meanwhile, President Trump says he plans to speak with Canadian Prime Minister Justin Trudeau in the coming hours ahead of the newly announced steep tariffs set to go into effect on Tuesday. Canada has since announced retaliatory tariffs.
Mexico also plans to unveil details of its own retaliatory tariffs on U.S. goods today. President Claudia Sheinbaum says her country does not want a confrontation over trade. Donald Trump says he'll speak with her as well sometime today.
FOSTER: Experts are concerned President Trump's tariffs could mean higher prices for American households on a wide variety of goods. CNN's Rafael Romo has more on what could be impacted the most.
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RAFAEL ROMO, CNN CORRESPONDENT: The tariffs are set to take effect on Tuesday, and the impact on American consumers may be deep. When it comes to U.S. trade with Canada, China and Mexico, it's very important to put the commerce with these nations in perspective. About one third of U.S. imports come from those three countries being targeted with tariffs by Trump.
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The commerce with these nations in perspective. About one-third of U.S. imports come from those three countries being targeted with tariffs by Trump. The president declared the national economic emergency to put the tariffs in place.
He's ordering 25 percent taxes on Mexico and Canada and an additional 10 percent on China. The U.S. imported $97 billion worth of oil and gas from Canada last year. That country's top export to the U.S. And according to data from the U.S. Energy Information Administration, the U.S. has become more reliant on Canadian oil since the expansion of Canada's Trans Mountain Pipeline.
The White House is not treating all products the same. The tariff on Canadian energy products is only 10 percent, not the 25 percent tariff announced on other Canadian exports.
Mexico is the largest supplier of fruit and vegetables to the United States. Last year, the U.S. imported $46 billion worth of agricultural products from Mexico, according to USDA data. And the biggest category of agricultural imports from Mexico last year was fresh fruits, of which the U.S. imported $9 billion worth, with avocados accounting for $3.1 billion of that total.
Over the weekend, Trump warned Americans of some pain to come in the aftermath of his decision to impose sweeping tariffs on America's three largest trading partners.
Trump declared a national economic emergency to put the tariffs in place. The president says the tariffs are aimed at curbing the influx of undocumented migrants and fentanyl across U.S. borders.
Rafael Romo, CNN Atlanta.
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