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Trump Threatens European Union with Additional Tariffs; Global Markets React Amid Fears of a Trade War; Trump Revokes Status of Thousands of Venezuelan Migrants; Trump: Meeting and Talks Planned with Putin and Zelenskyy; Beyonce's Cowboy Carter Wins Big at the Grammys. Aired 4:30-5a ET

Aired February 03, 2025 - 04:30   ET

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


[04:30:00]

RAFAEL ROMO, CNN CORRESPONDENT: 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.

(END VIDEOTAPE)

CHRISTINA MACFARLANE, CNN ANCHOR: Let's bring in Bert Hofman. He's a professor at the National University of Singapore and former World Bank country director for China. He joins us live from Singapore.

Thank you so much for your time this morning. As we know, Trump's tariff war is just getting started. And here in Europe, everyone is bracing for something huge because of the comments we heard from President Trump just last night.

I want our viewers to take a quick listen to this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, we're going to see what happens. It'll happen. But we're going to --

Might. We'll see how things work out. It might happen with that. But it will definitely happen with the European Union. I can tell you that. Because they've really taken advantage of us. And UK is out of line. But I'm sure that would -- I think that one could be worked out. But the European Union is -- it's an atrocity.

(END VIDEO CLIP)

MACFARLANE: But the European Union is an atrocity from President Donald Trump last night. This is, of course, a big concern for Europe. Not least because the U.S. are in a trade deficit with the European Union right now. What do you expect, you know, here Monday morning, waking up the reaction to be to these comments?

BERT HOFMAN, PROFESSOR, EAST ASIAN INSTITUTE, NATIONAL UNIVERSITY OF SINGAPORE: Well, the European Union has already said that they would be ready to take measures to confront the United States if there were to be the tariffs imposed. So it would be a next step in the tariff war, if you want. You already mentioned that.

Look, the European Union has a large surplus with the United States. It's the second largest surplus after China. And in Mr. Trump's world, that seems to be that if you have a trade surplus with a country that is abusing the country. He confronted Canada by saying, we have been subsidizing Canada to the tune of 100 billion a year. Whereas it really means that the United States is running a trade deficit with Canada. So it's hard to comprehend from an economic point of view where this is heading.

At the same time, this is already giving damage to the world economy because of the uncertainty that Mr. Trump is creating with his statements on tariffs, future tariffs, possible tariffs, that is already damaging the world economy.

MAX FOSTER, CNN ANCHOR: We just saw those European markets down more than one percent. Similar picture in Asia and futures for North America as well. New York looking down as well. The dollar's weakening. Just explain how investors are thinking right now. It's not just uncertainty, is it? It's that, you know, no one wins from a trade war, basically.

HOFMAN: Well, no one wins because it basically means that you get less efficient producers producing the stuff that used to be more efficiently produced. For the United States and for USMCA, if you want, it's particularly damaging because that's really one integrated economy. It's been a great success. First NAFTA and then the renegotiated version USMCA. So Mexico has enormous supply inputs into United States products and so has Canada. And it is really functioning as one economy. So Trump with his tariff is really dismantling that.

[04:35:03]

In a broader scheme, the tariffs on China. Of course, there already are tariffs on China. They add up to some 14 percent on average exports of China to the United States. Adding a 10 percent, it also comes to about 25 percent. So China, Canada and Mexico will be treated in the same way.

Europe had some tariffs on steel and aluminum exports in Trump one, and some of that has stayed. Now there is a clear risk for the exports of motor vehicles. Trump has mentioned that in the past.

Again, we're looking at a situation where you get less efficient production and where prices for consumers in the end go up. For the United States, your correspondent didn't mention a number, but the Peterson Institute of International Economics gave an estimate for just the tariffs on Canada, Mexico and China, the ones we're currently talking about. And that would be about half a percentage point more inflation for this year compared to the absence of tariffs. So it really hurts United States consumers as well.

MACFARLANE: Yes, and just to talk a little bit more about that. I mean, Trump has said himself, he admitted that this could bring pain for Americans. I mean, given the fact that he's viewing or eyeing up universal tariffs on all imports, you know, as perhaps the next step to this, how badly is this going to hit the average American consumer? What are we going to see?

HOFMAN: Well, of course, it depends on the level of tariffs. And he has spoken about 10 percentage point tariffs. The United States imports about 50 to 20 percent of its total consumption.

So that would mean that a two percentage point increase in the prices of overall consumption. That won't happen overnight, but it will happen over time.

For the world economy, it will mean lower growth. So it will also mean that the United States will have less opportunity to export and it will affect the jobs of Americans as well as the rest of the world.

FOSTER: OK, Bert Hofman, thank you very much indeed. I mean, it is horribly complex, but it's effectively just prices going up.

MACFARLANE: Yes, prices going up, possibly inflation too. We'll wait to see. Our thanks to Bert.

Now, newly installed U.S. Defense Secretary Pete Hegseth will travel to the border with Mexico in the coming hours. The Pentagon says Hegseth will meet members of the military working on President Trump's border crackdown in El Paso, Texas. His visit comes as the Pentagon announced it is preparing to deploy about 1,000 more active duty troops to the border.

FOSTER: U.S. Marines are arriving in Guantanamo Bay, Cuba to begin preparing for the expected arrival of deported migrants as President Trump wraps up his immigration crackdown. The Defense Department said the troops will be expanding the Migrant Operations Center. Preparation is expected to take weeks, but space constraints will likely make it impossible to meet Mr. Trump's stated goal of temporarily holding 30,000 people.

MACFARLANE: The Trump administration has revoked the temporary protection status designated for thousands of Venezuelan migrants in the United States. Former President Joe Biden granted that status and it gave them legal protection from deportation, but now they are in limbo. Stefano Pozzebon reports.

(BEGIN VIDEOTAPE)

STEFANO POZZEBON, CNN CONTRIBUTOR: President Donald Trump's decision to terminate temporary protective status for thousands of Venezuelan migrants on Sunday was widely expected. CNN had reported on the plans on Saturday. And yet, Sunday's decision will have enormous impact for migrant communities and families, especially in Florida, which is a state that Donald Trump famously carried in the November election.

The Secretary of Homeland Security, Kristi Noem, explained the decision was made because of the program was -- and I quote her words -- abused, and that the Venezuelan government had taken advantage of the protection status to send criminals and mentally ill to the United States. She said this without offering any proof. Venezuela is home to one of the largest migrant diasporas in the Western Hemisphere.

According to the United Nations, almost 8 million people, and that is about 25 percent of the total Venezuelan population, had left the country under the rule of authoritarian President Nicolas Maduro, mostly because of the deep economic and social crisis in the South American country.

Over half a million of these migrants now reside legally in the United States, and many of them have been touched by this revocation of a temporary protected status. While it's unclear exactly how many migrants and migrant families have been touched by Sunday's decision, most of them will have until April to either relocate or they will be at risk of deportation.

[04:40:02]

For CNN, this is Stefano Possebon, Bogota.

(END VIDEOTAPE)

FOSTER: More than 200 earthquakes have rattled one of Greece's most popular island getaways. We'll look at the warnings issued on Santorini, both tourists and residents alike.

(COMMERCIAL BREAK) MACFARLANE: Israeli Prime Minister Benjamin Netanyahu is in Washington right now. In a matter of hours, he'll take part in the second phase of the Israel-Hamas ceasefire negotiations, meeting with U.S. Middle East envoy Steve Witkoff. Netanyahu is scheduled to meet Tuesday with U.S. President Donald Trump.

FOSTER: In the meantime, the families of the latest group of freed hostages thanked those involved in their release and urged Israel to reach a deal to free all of the remaining hostages in Gaza.

On Sunday, the Israeli military blew up several buildings in a West Bank refugee camp. You can see the debris there rising from the explosions in this video. The Palestinian news agency says nearly 20 buildings were blown up in Jenin, leaving Palestinian families displaced.

MACFARLANE: The Israeli military launched a large-scale operation in the West Bank on the heels of the Gaza ceasefire deal. Israeli officials say the buildings were used as terrorist infrastructure. Israel has provided no evidence to support that claim.

Donald Trump says he has, quote, meetings and talks scheduled with the Ukrainian and Russian leaders, but he isn't giving away any details yet about when those talks will take place. So far, officials in Kyiv don't seem impressed by the Trump administration's proposals for handling the nearly three-year-long war.

FOSTER: On Saturday, the new U.S. envoy said Ukraine needs to hold elections, which have been suspended because of the war. An advisor to Mr. Zelenskyy says a peace plan that only consists of a ceasefire and elections is a failed plan. He's asking for a more in-depth approach from the Americans as Russian airstrikes continue to kill Ukrainian civilians.

[04:45:00]

MACFARLANE: Our Clare Sebastian's joining us. Clare, what more do we know about these potential meetings and talks and whether, in fact, they will happen?

CLARE SEBASTIAN, CNN CORRESPONDENT: Well so, we don't know anything at this point other than what Trump appears to have said on Sunday night to reporters, saying that the talks are scheduled. He didn't say who with. He simply said with Ukraine and Russia.

But we've just heard from the Kremlin this morning, Dmitry Peskov coming out and saying, look, Trump didn't say that exactly. He's saying that, actually, if you listen closely to Trump, he's simply saying that talks are actually planned, which, of course, both sides have said that they are involved in doing and willing to sort of engage with each other in talks.

And meanwhile, of course, Ukraine is very worried, given the noises that we've heard, certainly out of Russia, that they might be shut out of these talks. And this is why I think this comment around elections from Keith Kellogg, the Russian-Ukraine envoy of Trump's administration, is interesting, because he's saying, hold elections. Now, we know that Ukraine has put off elections. They're not allowed under the Constitution during a time of martial law, plus there are not insignificant logistical hurdles, right, of 20 percent of the country being occupied, seven million or six million citizens living outside the country.

But Russia has said that it believes that these talks would be illegitimate if they involved President Zelenskyy, because they have continued to maintain that they don't have beef with the Ukrainian people, simply with what they call the Kyiv regime, and he has ruled out talks in decree with Putin.

So they're sort of making this complex legal argument, but I think for Ukraine, this looks possibly like the Trump administration is trying to offer a carrot to Russia through this call for elections, and that has certainly raised some nerves in Kyiv.

FOSTER: How, I mean, is Zelenskyy's sort of team reacting? Because there is this narrative, isn't there, that's building up, whether it's Russia or some people in America or even within the country, that he's become autocratic, because he's running the country without holding elections. Of course, his reason for that would be, you can't hold elections during a war, but he's got to get a handle on that narrative, because it is growing a bit.

SEBASTIAN: It's a really sensitive one, right, because I think at this point there's not an obvious alternative. At one point, there was talks around Valeriy Zaluzhnyi, the former head of the armed forces. He has now been sort of moved slightly to the side.

He's the Ukrainian ambassador to the UK, right? He's here in the UK. So there's no one talking about an alternative or a clear alternative at this point, and obviously, we're in a very sensitive situation when it comes to the war, so they want some kind of stability, even if there are clear questions around how Zelenskyy has run it.

Plus, Ukraine doesn't want, number one, for people outside Ukraine to dictate terms to Ukraine, and number two, it does not want the sense of equivocating when it comes to these talks, that Ukraine and Russia both need to make concessions. They want it to be made clear that Russia is the aggressor. They are the ones who need to be sort of backing down here, not Ukraine giving some ground and Russia giving some ground. So that's the sensitivity there.

But you're right, Zelenskyy's approval ratings are not what they were at the beginning of the war, and that's why I think it's sensitive, and there certainly are conflicts within Ukrainian politics.

MACFARLANE: And Zelenskyy continuing to sort of lean on these bargaining chips ahead of any potential talks taking place, calling on NATO membership still, saying that it is the cheapest option when it comes to Ukraine. Does he have a point there? Or again, is this just posturing? SEBASTIAN: No, I think this is a really significant point to make at this point in the war, because if you look at the front lines, Ukraine -- Russia is gaining ground at not a sort of strategic rate, but they are steadily moving forward. We heard today, for example, from the head of the armed forces, General Syrskyi in Ukraine, saying that they're focused now simply preventing the enemy advance, and he said the enemy is not reducing the intensity of their attacks.

So at the moment for Ukraine, it's pretty clear that there isn't a single weapons package from any of their allies, even from the U.S., that could turn the tide on the front lines.

So the NATO issue rises even higher in terms of priority. They believe that an invitation, some kind of more concrete step when it comes to NATO, is really the only guarantee against future Russian aggression. And Zelenskyy continuing his sort of flattery of Donald Trump has made it clear that he believes the U.S. holds the key to that.

So that is really significant. We've seen NATO officials informally meeting today, so Ukraine will be looking for any tea leaves that it can read out of that.

MACFARLANE: Keep an eye on that. And Clare, thanks very much.

Now, one of Greece's top tourist spots is issuing warnings after experiencing more than 200 small earthquakes.

FOSTER: Yes, officials say people should avoid large indoor gatherings on the volcanic island of Santorini. Millions of tourists visit the island each year. So far, there's been no damage, but officials are telling people to stay away from ports, including one that's popular with cruise ships.

MACFARLANE: Santorini is also closing schools on Monday. The island hasn't been hit by large earthquakes since 1956.

FOSTER: Ahead on CNN NEWSROOM, music's biggest night, the Grammy's star-studded ceremony and the Queen Bee's big win. Lots to go for Taylor Swift there.

MACFARLANE: Don't know, handed over the award. We'll have more to chat about after the break.

[04:50:00]

(COMMERCIAL BREAK)

MACFARLANE: Hi, welcome back. One of the most prominent stars in the Chinese-speaking world has died.

FOSTER: A Taiwanese actor, Barbie, who died of a flu-related illness during a family holiday in Japan. She first rose to fame as a teenager in the mid-1990s and was also known by the stage name Big S. Hsu's popularity hit new heights in 2001 when she started in the television drama Meteor Garden.

The news of her death quickly became the highest-trending topic on China's Weibo social media platform. Barbie, who was 48 years old.

Now the University of Iowa is honoring a former star player, Caitlin Clark, by retiring her number 22 jersey. The ceremony recognized Clark for her historic achievements at Iowa, including becoming a college basketball's all-time leading scorer.

MACFARLANE: Her return to the school comes as Iowa defeated fourth- ranked USC 76-69, handing the Trojans just their second loss of the season. Now, Clark is making waves, of course, in the WNBA, recently being named the 2024 Rookie of the Year.

Oh, in the spotlight this hour, Beyonce's big night at the Grammys.

FOSTER: The celebration honored some of music's biggest stars, but the queen, Bee -- Bey isn't it?

MACFARLANE: Bey.

FOSTER: Bey took center stage.

[04:55:00]

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The Grammy goes to -- I mean, it could do either, actually. Cowboy Carter.

(CHEERING)

UNIDENTIFIED MALE: Beyonce. Beyonce.

(END VIDEO CLIP)

FOSTER: Despite being nominated several other times, this was her first win for Album of the Year. That's amazing, isn't it?

MACFARLANE: Yes, it really is. Beyonce also became the first black woman to win a Grammy for Best Country Album. And while accepting that award, she had a message for all artists.

(BEGIN VIDEO CLIP)

BEYONCE, WINNER, ALBUM OF THE YEAR AND BEST COUNTY ALBUM: Wow, I really was not expecting this.

(CHEERING)

BEYONCE: 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)

FOSTER: Kendrick Lamar was also a big winner. With his top-charting track Not Like Us, he swept all the categories. He was nominated in Taking Home Song of the Year, Record of the Year and Best Music Video.

MACFARLANE: And one of my faves, Chappell Roan, was crowned Best New Artist. In her acceptance speech she called on the music industry to reform its health care coverage for emerging artists.

FOSTER: The California Wildfires played a role in the night's itinerary as well. The Grammys honored emergency workers and highlighted fundraisers for wildfire relief. Just on the Queen Bey -- apparently, she didn't even get a nomination at the Country Music Awards, and then she sweeps the boards here, which is quite interesting. But also, how Taylor Swift didn't get any nominations here.

MACFARLANE: Well, I thought it was great to see Taylor Swift giving her the award for Best Album of the Year. I mean, remember the history between the two of them, right? And that, to me, felt like a very kind of full-circle moment.

FOSTER: Can you be a fan of both, my question for you?

MACFARLANE: They what?

FOSTER: Can you be a fan of both?

MACFARLANE: Absolutely, you can be a fan of both. Why not? I am.

And that is it for us here at CNN NEWSROOM. He's Max Foster, I'm Christina Macfarlane. CNN "THIS MORNING" is up next.

I'll do it for you.

FOSTER: That's what we should have done all along.

[05:00:00]