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Trump Set To Speak To PM Trudeau As Tariffs Set To Begin; Democrats, Government Workers Demonstrate in Defense of USAID; Crews Begin to Remove Wreckage from Potomac River; Stock Market Slide as Trump's Trade War Rattles Investors. Aired 3-4p ET

Aired February 03, 2025 - 15:00   ET

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


[15:00:39]

ISA SOARES, CNN HOST: I'm Isa Soares in London. Thanks so much for joining me today on CNN NEWSROOM. Let's get straight to the news.

And we begin this hour with President Donald Trump's trade hardball. At this hour, he is set to speak for the second time today to Canadian Prime Minister Justin Trudeau just before 25 percent tariffs on America's northern neighbor will take effect.

It is unclear if the two leaders can negotiate their way out of a trade war. Trump, not sounding confident earlier in the Oval Office. Have a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Because we haven't agreed on tariffs yet. And maybe we will. Maybe we won't. But we have a very good relationship. I also spoke with Prime Minister Trudeau of Canada, and we had a good talk in the morning.

Canada is very tough. Canada is very -- you know, we're not treated well by Canada.

(END VIDEO CLIP)

SOARES: So Trump has a big ask. And that is statehood, something Canada has repeatedly said is off the table at riskier, higher prices for Americans on items like gas, cars as well as fertilizer.

CNN's senior White House reporter Kevin Liptak is at the White House for us.

And, Kevin, you know, we saw today Trump making a deal with Mexico, pausing that 25 percent tariff on Mexican goods in exchange, of course, what President Claudia Sheinbaum saying shell send 10,000 Mexican National Guard troops to the border.

This Canadian negotiation, from what we heard there, that little clip from President Trump slightly, slightly looks slightly more complicated. What are -- what have you heard and what are we expecting in the next hour or so? KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yeah. And I think it's

safe to say that the conversations over the weekend between the White House and Mexican officials proceeded a little better than the conversations with Canadian officials. At least that's what we heard from one of the top economists here at the White House, Kevin Hassett, a little earlier today before that deal was announced.

But I do think the fact that President Trump has now scheduled this follow up phone call with Prime Minister Prime Minister Trudeau, at least gives you a sense that these conversations are ongoing. Now, will this result in a reprieve for Canada from these 25 percent tariffs that Trump has threatened to put on at midnight? That will remain to be seen?

And, you know, I was talking to Canadian officials earlier today after that initial phone call, and they weren't necessarily all that optimistic that Trump would ease up on his threat for Canada. But one thing that I do think has resulted from this deal with Mexico is a little more clarity about what Trump exactly is looking for from Canada when it comes to these tariffs.

You know, until now, Canadian and Mexican officials had voiced some frustration. Trump had not exactly said put a quantifiable metric on what he was looking for in order to avoid these tariffs. Now they have a better idea of what exactly the price will be when it comes to sending, for instance, troops to the border, which is exactly what Mexico has agreed to.

So I do think the fact that these two men are talking, we expect them to be talking at this hour is probably a good sign. Now, I don't think it can be avoided that we saw some significant losses in the stock market earlier today as President Trump was holding this first round of phone calls. He is someone who has always been highly attuned to the stock market. That could have played a role in it as well.

In that Oval Office meeting that we just saw a clip from, I think there were some interesting remarks from the president. One, he was asked who blinked in this deal with Mexico? Was it himself or was it the Mexican President Claudia Sheinbaum? He said that neither blinked, that both sides were able to come up with something that they wanted and that they could agree to. And so, as Trudeau heads into his second round of phone calls, he has that to go by.

The other thing that he said was interesting was that he planned on conversations with China within the next 24 hours, and this was sort of in his trademark vague way. We don't know that he's speaking directly to the Chinese president, Xi Jinping, but that would be a significant item as well, because, remember, at midnight tonight, in addition to these North American tariffs, you will also see a 10 percent tariff on Chinese imports, which of course could cause a significant trade war to escalate between the two -- world's two largest economies.

So all of this remains to be seen how it will play out.

[15:05:02] But I think we could see some developments later today.

SOARES: And I know you'll be across them, of course, at the moment we have some sort of readout of that call with Prime Minister Justin Trudeau. Do come back to us. Thanks very much, Kevin Liptak there for us at the White House.

And the temporary pause that I was just saying on Mexican imports will provide some relief for consumers. But from the gas pump to the grocery store to even car prices, Americans could soon be spending more just on basic items. The tariffs on Canada and China are estimated to cost the typical U.S. household over $600 a year.

Our Vanessa Yurkevich is here to break it all down.

I mean, Vanessa, just break it down for us. You know where -- what items will be the most expensive here?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yeah, there are some things you think about right off the bat, like food. And there are other things like lumber that maybe you haven't thought of, but can have a significant impact on everyday Americans.

Let's start with lumber. This is going to be more expensive as it comes in from Canada. We get about 30 percent of our lumber coming in from our North American trading partner. And if those costs go up because of these tariffs, you're looking at construction materials for homes currently at about $3 billion. That's going to escalate to $4 billion. That's across all home building.

You also have auto parts. We get a lot of parts from Canada to make cars here in the United States. One estimate suggests that car prices, because of these tariffs, could go up by about $3,000. And then from Canada, you also get grain, meat, poultry.

So those are food items that may become more expensive for Americans, and fertilizer, a key component of fertilizer coming in from Canada, that could raise prices for farmers and oil. Of course, that is at a 10 percent tariff, but we are learning that we could see here in the U.S. an increase of about 15 -- 15 cents on the gallon for gas prices. And that could happen pretty soon.

And I just want to mention China. Of course, we are expected to see a 10 percent tariff go on China exports coming into the U.S. That's on things like toys. That's on things like electronics and footwear.

And I mentioned footwear because we as Americans import 90 percent of our footwear, over 50 percent comes from China alone. So that will have an impact there.

And, of course, when you're talking about tariffs, you're talking about a trade war. You're then talking about retaliatory tariffs. And Canada has already announced that they're going to be throwing a 25 percent retaliatory tariffs on U.S. exports into Canada remains to be seen what China does. But if history has anything to say, we know that China has hit the ag

community particularly hard here in the U.S. Don't forget, there's a 25 tariff -- 25 percent tariff already in effect here in the U.S. on agricultural exports from the last trade war in 2018 under Trump. We'll see if China retaliates once again -- Lisa.

SOARES: Yeah, we all remember that. And if you're -- if you're in the United States, if you're a viewer and you're trying to make sense, okay, how soon these are expected to go into effect at midnight, 12:01? How soon will that feel that in my pocket? How soon will I start feeling the impact, the surge in those prices, Vanessa?

YURKEVICH: Yeah, well, some of the larger businesses and companies here in the U.S. have been able to plan ahead. So they've brought a lot of merchandise and product in early. Some can absorb some of that cost.

But a lot of businesses here in the U.S. simply cannot. And as time goes on, the longer these tariffs are in place. And that's a big question. How long will President Trump keep these tariffs in place? It gets a lot harder to absorb that cost. And ultimately, the consumer will start to feel that pretty quickly.

SOARES: Yeah. And if you're a big company maybe you can plan ahead for those who are much smaller, much more difficult, of course.

YURKEVICH: Yeah.

SOARES: Vanessa Yurkevich, appreciate it. Thank you very much.

YURKEVICH: Thank you.

SOARES: Well, to discuss the economic impact of these tariffs, Catherine Rampell joins me now. She's a CNN economics and political commentator and opinion columnist at "The Washington Post", very well known face here on the show.

Catherine, I'm really, really grateful that you are here with us. What a day it has been. Just walk us through. And Vanessa was talking us through what impact this may have, Canada, as well as China and 20 and 10 percent here. Talk us through the repercussions of these tariffs can have on an average American because we know that around 60 percent I think of U.S. import -- imported oil comes from Canada. So we could be looking I'm guessing at gas prices increasing. What else are you seeing being impacted here?

CATHERINE RAMPELL, CNN ECONOMICS AND POLITICAL COMMENTATOR: We've already seen an energy company, a Canadian energy company called Irving tell its customers yesterday its propane and fuel oil customers throughout New England that they will bear the full cost of the tariff immediately on Canadian energy. That's a 10 percent tariff for now.

We've also heard about home builders freaking out because a lot of their lumber comes from Canada. Not to mention the auto industry. The typical auto part that is placed in a car that is, you know, assembled in America, sold to Americans, crosses, our north American border or our border with Mexico or, excuse me, our northern border or a southern border multiple times in the process of becoming a finished product.

[15:10:21]

Each time something crosses over from Canada, that will be another 25 percent tariff getting placed on that intermediate good. Those will be cumulative. So even if car companies have some inventory now and you know, they -- they have been trying to stock up, as Vanessa mentioned, that will start to bite very, very soon.

And then there are other things, you know, produce -- any produce that we happen to get from Canada. And we do get some -- that's very difficult for companies to stock up on because its perishable. So those are the kinds of things where you might begin to see pricing pain and potentially, you know, layoffs or furloughs or what have you at American companies relatively soon.

SOARES: Yeah. And I think that's so important, the long -- the long view here, what we could be looking at. We heard from President Trump today said we have his words, big deficits with Canada and that the U.S. wants nothing. Does it need Canada for anything? And that includes cars, energy and lumber.

Do you think then that the U.S. can take over? Is it ready? Is it prepared to take over any of these productions here at this point?

RAMPELL: No. Trump, not very long ago said that we were in the middle of an energy crisis in this country, while the United States is pumping more oil per day than any country has in history. And yet, he said, we are having an energy crisis. And recall, he complained all the time about the fact that Democrats, among others, had protested or obstructed the construction of the keystone pipeline.

Where do you think that oil was coming from? From the Canadian tar sands, if it had ever been built.

So it's very clear that even Trump has recognized that we need energy from Canada. We need inputs from Canada. It's not like you can just shut off the spigot.

Yes, Canada is very dependent on us as well, both as customers and as producers. But this will be very painful for the United States unless he can develop some sort of off ramp.

SOARES: And, you know, tariffs, as viewers will know, are stagflationary, right? Not just impacting inflation potentially, but also growth GDP. So I mean, what impact will we be looking at here for the U.S. economy.

RAMPELL: You're exactly right. So these will have an increase in prices, exactly how much of that price is that price increase is borne by American consumers versus other companies in the supply chain will really depend on what the product and what the market is. You know, for some things it gets passed along entirely. For some things, maybe, a company that's supplying the good or importing the good takes a margin hit. We don't know.

But though a lot of companies do not have the available option to absorb a 25 percent tariff or even a 10 percent tariff, as it may be, and in those cases, they may have to shut down production. And that can have cascading effects for others that are dependent on that company in the supply chain.

So, yes, you're exactly right. It will not only raise prices, it will it will likely reduce demand for the goods that are becoming more expensive and hurt the American companies that were talking about, that are affected, not to mention the companies that are the targets of retaliation.

Canada has been very strategic about what kinds of American products it would have retaliatory tariffs on. Think Kentucky bourbon and Kentucky peanut butter or Florida orange juice. These are things that are produced in red or purple states that will cause a lot of pain if suddenly Canadians start buying fewer of those products.

SOARES: Look, I -- the euro I can tell you on this, on this side of the pond, the Europeans are already fretting and concerned that they may be next here, even as were discussing Canada and indeed China. But we did hear, um, sticking with Canada from Trump's economic advisor, Kevin Hassett, who has repeatedly claimed, Catherine, that this is a drug war, not a trade war.

How does -- how do you make sense of that? What do you say to that?

RAMPELL: I don't know, there are like a few pounds of fentanyl that come over the Canadian border each year, any amount of fentanyl is bad, but this seems somewhat disproportionate to the -- to Canada's ability to do anything about this drug trade, and that's part of the challenge here.

It's not clear what Trump actually wants in terms of concessions. Even in what was supposed to be a victory in Mexico, Trump has been touting that the Mexican president committed to 10,000 troops, 10,000 Mexican troops being sent to the us-Mexican border.

[15:15:12]

Well, guess what? Mexico already has 15,000 troops there. Trump just didn't seem aware of it, but that was a way for him to save face, I guess, and prevent the markets from freaking out. And then he can say, aha, I extracted this painful concession or non concession out of Mexico and therefore we won't have tariffs or at least we'll delay the tariffs. I don't know what the equivalent would even be in Canada because I think it's about what he's pretending to be mad at Canada for. Yes.

SOARES: And I think it's less than 1 percent on the fentanyl, roughly from what I remember from the top of my head.

But you were talking about stock markets there very quickly. Catherine, we know President Trump looks at those stock markets is reacts to the stock markets. We saw them teetering today have gained somewhat. They made up ground -- making up some ground. I mean, the Dow Jones right now is pretty flat. But we -- European markets were down, all the stocks were down. China, Asia also down.

If this continues, if we continue to see the impact of this, do you think that is enough to rattle him to change his mind or do you think he doesn't care?

RAMPELL: I think the market is one of the few things that will Trump into backing off. And perhaps, I don't know, but perhaps part of the reason why he was motivated to come up with this non-solution solution with Mexico today is that markets opened pretty far down. And as you point out, they have since recovered somewhat.

So yes, if there were a market freak-out, a much more dramatic market freak-out, probably that would discipline Trump to some extent whether it would cause him to back down from some, from all of his erratic announcements, I don't know.

SOARES: Catherine Rampell, we appreciate you taking the time to speak to us. Good to see you, Catherine. Thank you.

RAMPELL: Thank you.

SOARES: And still ahead right here, the fate of billions of dollars of foreign aid is in limbo after a de facto takeover of the humanitarian agency USAID by Secretary of State Marco Rubio. Bringing that story after this short break.

(COMMERCIAL BREAK)

[15:20:24]

(BEGIN VIDEO CLIP)

REP. JAMIE RASKIN (D-MD): Elon Musk, you may have illegally seized power over the financial payment systems of the United States' Department of Treasury, but you don't control the money of the American people. The United States Congress does that.

(END VIDEO CLIP)

SOARES: Yeah.

Democrats, they're protesting today outside USAID headquarters, one of the many agencies President Trump and Elon Musk are working to dismantle. One department official tells CNN it is an apocalypse at USAID, which for decades has doled out billions in foreign aid to alleviate poverty, advance public health and assist in disaster relief worldwide.

Now, the website of USAID is down. Employees have been told to stay home, and it may lose its status as an independent agency. Secretary of State Marco Rubio announcing today he will become its acting director.

I want to go to our Jennifer Hansler, who's across the story. She's covering the State Department for us.

And Rubio said today, this is not about ending the programs that USAID does per se, but that's not what we heard from Elon Musk, is it? So what exactly is going on? Just break it down for us, Jen.

JENNIFER HANSLER, CNN STATE DEPARTMENT PRODUCER: Well, Isa, they're trying to toe a very fine line here in terms of whether they are fully eliminating the agency and everything it does or whether they just eliminating the agency as an independent body. And of course, we heard from Elon Musk, who has played an outsized role in this administration's decisions on federal agency, saying that USAID needs to die, it needs to be eliminated.

Rubio was sort of taking a more nuanced approach, saying not necessarily. Everything USAID does has to be taken away, but they are reviewing basically everything. And it's important to keep in mind here that the administration has already put a freeze on almost all foreign assistance. So a lot of the work USAID was working on has already been put on hold under this 90 day review that was established by President Trump in his first day in office.

Now, here in Washington, D.C., there is a lot of confusion and a lot of chaos around what is going on with USAID. Rubio seemed to de facto, he confirmed de facto that they had taken over the agency. But we have yet to hear any official notice of this.

The folks we're talking to in the agency said they have gotten virtually no communication from any leadership about what is happening next, whether they should even report to work tomorrow. Today, the people who were working in the headquarters were told, don't show up. So, there's a lot of questions here.

And then more broadly, the impact here could be very, very large. There are thousands of jobs at stake here, billions of dollars in aid not only to for humanitarian reasons, but also development around the world. And people say this is a key soft power tool of the U.S. This is something they're using to foment relationships around the world. And they say that if the U.S. isn't there, other countries like China, other groups are going to step into this vacuum. They say it is a national security imperative.

Now, there are also questions of legality here, Isa. We heard from the Democrats saying this is not a legal move, that this is something that was established by law and the president cannot unilaterally decide to dismantle an agency without consulting Congress. The president said earlier today that he does believe he has this authority -- Isa.

SOARES: Yeah, yeah, he says he has the power to scrap it. The question is, what can be done at this point, right? I had a conversation with the president and CEO of Oxfam America on my show earlier, and she was flabbergasted, as so many are.

So in terms of legal -- I mean, first, is it even legal? What are they doing? What can Congress do here? HANSLER: Well, Congress suggested they are going to be taking this to

the courts. We had a number of Democratic lawmakers gathered there outside of the headquarters in Washington, D.C., earlier today. They said they would take this to the court of public opinion, but also the legal courts to push back on this maneuver that they say is a violation of the law.

But the question remains how quickly anything can be done to actually stop this and whether they're actually going to get any of their Republican colleagues to also join in this fight -- Isa.

SOARES: Yeah, very concerning indeed, especially when we know that Musk, you know, is -- is not an elected official, a federal employee, or, you know, hasn't even been approved by the Senate. Very worrying.

Jennifer, really appreciate it. Thank you very much.

Now a new phase of the recovery operation begins in the Potomac River. Crews are removing the wreckage of the passenger plane and Black Hawk helicopter that collided last week, killing all 67 people involved.

So far, 55 bodies have been recovered.

CNN's Pete Muntean joins us with more on the investigation.

And, Pete, you spoke with the head of the NTSB today. Just give us a sense of what they told you.

[15:25:03]

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Let me just set the scene here for you. Behind me is the Potomac River, just off the edge of runway 33 here, where American Airlines Flight 5342 was seconds away from making a successful landing here late Wednesday night. I can see the dinner cruise boat that D.C. officials commandeered that night to turn into a command center. Still, a command center at this hour.

The big thing, though, is the large floating crane that is off the left side view. Almost hard to believe of any airplane coming in to take off and land here. And that is where the slow, painstaking process of recovering parts from the eight foot deep, cold Potomac River is still going on right now. Hours long today, they spent about two hours recovering a jagged piece of fuselage out there. And then the salvage operation also covered a jet engine, which appeared mostly intact.

Some really key clues for investigators, as this is really just at the infancy of this investigation. We will not hear from the National Transportation Safety Board today, although we will hear at the top of the hour from unified command. That is the large conglomeration of officials from across the area DC, Maryland and Virginia working on the salvage operation here.

I did, though, speak to NTSB chair Jennifer Homendy, and she says right now investigators are trying to download the data from the combined voice and data recorder on board the Black Hawk helicopter. They say that will have key pieces of information. They say the data is a bit waterlogged, and so they're still trying to extract that right now. And I want you to listen to what the NTSB head told me in an exclusive interview.

(BEGIN VIDEO CLIP)

JENNIFER HOMENDY, CHAIR, NTSB: Every piece of information is critical to the investigation. And so, the NTSB is about transparency. So when we can provide that, I think that will be helpful to provide some additional context and what we're looking at in this investigation.

(END VIDEO CLIP)

MUNTEAN: Right now, investigators are really focusing on that data. And also going to ask some big questions, no doubt about why that helicopter route was able to exist here so close to the final approach paths at the airport.

NTSB chair Jennifer Homendy essentially tells me that everything is on the table right now, and they may have to issue urgent safety recommendations. Although right now, the FAA, the Federal Aviation Administration has at least temporarily closed that route.

SOARES: I know you'll stay across the story for us. Pete Muntean there, thanks very much, Pete.

And after the break, how the U.S. markets are reacting to the impending tariffs on goods imported from Canada, 25 percent and China 10 percent? That's after this short break.

(COMMERCIAL BREAK)

[15:31:11]

SOARES: Welcome back, everyone.

After an early selloff on Wall Street, U.S. stock markets are recovering somewhat. When Trump announced his 25 percent tariffs on nearly all Mexican imports will be on hold for a month. But you saw how the Dow Jones started out now down just 2/10 of a percent. But what a day it has been.

Our Richard Quest has been keeping an eye on the markets.

And, Richard, should we be paying much attention to these stock markets. You know, they go up, they come down. They seem to have regrouped. Your thoughts on this?

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Oh, of course, we should. Let's go back to that graph. That chart that you were talking about. Yes.

Now, there was a band about 5,600 points. But what was it that sent it rallying back up again? It was quite simple. It was the fact that that Mexico's president had convinced Donald Trump to -- to at least delay the tariffs by 30 days. Now, the significance there, Isa, is that we can time the markets

gyrations to the various statements that we are hearing. So, obviously, Mexico massive trading partner. No tariffs there. Therefore, the market comes back.

Canada, big trading partner, now let's wait and see what happens with Trudeau and whether they manage to do a deal there.

Clearly, Donald Trump is in a transactional mood despite the fact I've got quotes from him here. He's saying, no, this is not a negotiating strategy. No, we're going to do it. Well, it's clearly a negotiating strategy.

SOARES: So, then, are we expecting looking ahead to Canada? We've got Canada 25 percent. We know that Trudeau, Prime Minister Trudeau will be speaking or is speaking this hour with President Trump. We've then got China 10 percent.

Talk us through the impact of this -- if, of course, this goes ahead at one minute past midnight.

QUEST: Okay. I think there's a certain difference with Canada. There seems to be an animus about Canada. Donald Trump again referred to Canada becoming the 51st state. So it's almost as if I can't confirm, obviously, but it's almost as if he wants to cause the maximum amount of trouble and disruption for Canada in a way that he was very quick to go along with the Mexico -- Mexican president.

Now, if you look at China, so let's say China gets tariffs on and he's already threatened today the E.U. almost certainly. So, one assumes the E.U. is working out what they can offer. The U.K. might get away with it. He seems to be more favorable towards the U.K.

This is no way to run a trade policy, by the way, but it is what we've got, so we'll just have to live with it. And everybody's working out what their price is. What's my price?

SOARES: Yeah. It's like you said, you and I right at the beginning. This is very transactional president. We'll see what we'll get in the hours ahead.

Richard, as always, thanks very much. Richard will be back in half an hour. Thank you, Richard.

QUEST: Thank you.

SOARES: I want to bring in Larry Sabato, who is the director of the UVA Center for Politics, a well known face here on the show.

Larry, thanks very much for joining us.

Look, there's so much for us to start off with. Let's start with Mexico. And what is agreed with President Sheinbaum that we just saw in the last few hours. How will Trump frame this? I mean, will he frame them, frame this as a win for him, Larry?

LARRY SABATO, DIRECTOR, UNIVERSITY OF VIRGINIA CENTER FOR POLITICS: Oh, that's a certainty.

Even if it had been a big loss, he'd frame it as a win. And of course, his MAGA base would go right along with it and swallow it. But it is very interesting. What Richard was saying about the contrast between his dealings with Mexico and Canada, he really is trying to aggravate, to the greatest extent possible, the sweetest, most reasonable ally we've got, which is Canada.

And they are -- they're truly offended, deeply offended. I think this is -- this is going to remain in their memory for a long time. And the chaos of the Trump administration will have unfortunate effects, years, hence.

[15:35:03]

SOARES: And the argument always is that we've heard so far from this administration is the drug war talking about fentanyl, that we know that fentanyl is roughly, what, less than 1 percent or 1 percent or so.

So is this -- is this you think political? Is this targeted at Prime Minister Justin Trudeau? I mean, how do you frame this then? I mean, the biggest ally, closest neighbor, how do you make sense of why he's going after Canada?

SABATO: Well, he doesn't like Trudeau. That's become very obvious over the years. So maybe that's part of it.

SOARES: Yeah.

SABATO: Of course, Trudeau is going out the door.

I think, you know, there is a bully element, a big bully element to Trump. And who do bullies pick on? People they perceive as -- as weak or who will not fight back.

I think Trump is miscalculated here. I think Canada is going to fight back and is already fighting back in major ways. Maybe that's part of it. Who knows how rational it is in Trump's mind?

SOARES: Yeah, well, we don't and no one can -- can prepare as we have, as I've been hearing in the last few hours from Europeans and how they're preparing for the possibility of tariffs on the E.U.

But let's look ahead. I mean, so much for us to get through. Let's look ahead and focus on USAID that we've seen, of course. What do you make of what we have been seeing today from this administration? So much confusion, so much nerve-wracking moments for so many of those employees for an organization that plays a crucial role right around the world.

SABATO: Yes. The irony here is frankly upsetting, despicable even the richest man in the world acting on the -- on Trump's behalf is defanging or maybe closing down, though Marco Rubio, the new secretary of state, seems to disagree. Closing down the agency where America does the most for the poorest around the world, the richest man closing the agency that helps the poorest.

It's an embarrassing image for the university, for the -- for the United States of America. I doubt Trump cares, but it does put us in a very bad light.

SOARES: Yeah. And look. And its less than 1 percent, I think, of the federal budget. Just to put it into context for our viewers, if they -- if, you know, they're trying to make sense of why he's doing, why he's doing this.

So where does this leave? We've seen some protests today outside USAID offices. Democrats speaking out. I haven't had that many, to be completely honest with you on this, but are we looking at a constitutional battle here? Possibility of constitutional battle between the Congress -- Congress and the White House?

SABATO: Well, most of the best lawyers in the field and constitutional experts think if this isn't unconstitutional, it is illegal. And Trump, of course, doesn't particularly care that its against the rules.

But what you said is very critical, Lisa, we have not seen a strong reaction from the Democrats. And I'll tell you what's happening at the grassroots. They're getting furious at the Democratic leaders for not getting off their duffs and doing more about what Trump is doing, much of it appearing to be either unconstitutional or illegal.

We have three co-equal branches defined by the Constitution. I guess at this point we only have one.

SOARES: Look, it is -- it is quite staggering to see. I was surprised. I thought maybe I missed it. I was surprised to not see more voices come out in relation to this, not just to this, but also what were seeing in terms of the changes at the FBI, which is another aspect I want to get your -- your thoughts on this.

We saw the Justice Department instructing, and we spoke to our correspondent and they said top of the show, thousands of FBI employees, Larry, to provide information about their work as they investigate their -- their work around the investigation as to say, on January the 6th.

In the last two hours or so, Trump did not answer. He believes anyone at any level should be fired. Instead -- instead, what we saw is him praising Kash Patel, his pick to run the FBI.

What does it mean for the state of the country? If federal agents who were assigned to cases are fired for doing their job, and we don't know what level they were working on, but this is incredibly troubling.

SABATO: It's utterly absurd and frightening. It's absurd because how can you fire people who simply did the jobs they were assigned to do by their superiors? Not that the superiors were doing anything wrong either. You know, there was an insurrection and an attempted coup d'etat on

January 6th of 2021, and many people think that was a bad thing. And it was important to prosecute some of these very violent offenders who attacked the police. Trump is not one of them. And, of course, Trump either pardoned or commuted the sentences of all of them.

But this is having a terrible effect -- terrible, demoralizing effect at the FBI.

[15:40:04]

And if Trump were to get his way and to dismiss thousands of agents, how in the world would all the cases that are before the FBI that are being well worked by the agents on a daily basis -- how would they hold up? How would they continue?

SOARES: Some very good questions, Larry, which unfortunately we don't have the answers to. Right now, we don't have time to go into it. But I appreciate you laying it out for us, as always, great insight.

Thank you, Larry.

SABATO: Thank you, Lisa.

SOARES: And coming up right here on the show, the deadline to begin negotiations on the next phase of the Israel-Hamas ceasefire has now passed. What we're learning about the status of those talks, as Israeli Prime Minister Benjamin Netanyahu prepares to meet with President Trump tomorrow.

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[15:43:56]

SOARES: Benjamin Netanyahu is in Washington, D.C., to meet with President Donald Trump as uncertainty looms over the next phase of the ceasefire in Gaza and the terms of the initial agreement, talks on the second phase of the deal were supposed to start by today. Yet no details from the negotiating team for Israel have been unveiled.

Our chief national security correspondent, Alex Marquardt, has more for you from D.C.

(BEGIN VIDEOTAPE)

ALEXANDER MARQUARDT, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Netanyahu has arrived now in Washington after leaving Israel on Sunday. He is expected to be in the nation's capital for most of this week, having meetings with all kinds of people, including Donald Trump's Middle East envoy, Steve Witkoff, on Monday, the speaker of the House, Mike Johnson on Thursday.

But, of course, the biggest moment is going to be the meeting between Netanyahu and President Trump taking place on Tuesday. It is the first foreign leader that President Trump is welcoming to the White House since he returned to Washington after being inaugurated back on January 20th.

This comes at a very delicate moment for Prime Minister Netanyahu. The ongoing ceasefire in Gaza is supposed to enter its second phase in just a few weeks time.

[15:45:01]

The negotiations over that second phase are supposed to begin as early as Monday, but there are no signs yet that Netanyahu is inclined to send a team to start those negotiations. Just a reminder for our viewers in the second phase of this ceasefire, the war is supposed to end and the IDF is supposed to withdraw its troops from Gaza.

There is no sign. There are big questions about whether Netanyahu is going to agree to pull those troops out and to end the war. If he does that, he risks his government. He risks the survival of his government. He's risking his career if his government collapses and he leaves power, he faces all kinds of legal issues and could end up in prison.

But if he doesn't agree to end the war, doesn't agree to phase two, he could anger the new Trump administration. The Trump administration, President Trump very much wants to see this war end. And for the rebuilding process to begin, they have made clear that they want this Gaza war to end.

And if Prime Minister Netanyahu doesn't agree to that, then he could start this new Trump administration off on the wrong foot with Donald Trump. And then looming over all of this are questions about normalization between Saudi Arabia and Israel, which is one of the biggest, if not the biggest goal for President Trump when it comes to the Middle East. And in order for Saudi Arabia to agree to normalize ties with Israel, Prime Minister Netanyahu would have to end this war and agree to a path to Palestinian statehood.

Two items which are far from clear right now that Prime Minister Netanyahu would agree to.

Back to you.

(END VIDEOTAPE)

SOARES: Thank you very much, Alex Marquardt there.

Well, the U.N. Agency for Palestinian Refugees says shocking scenes in the West Bank are putting people, putting the Gaza ceasefire at risk. Israel's military detonated these mass explosions. Have a look at this. In the Jenin refugee camp, a Palestinian news agency says nearly 20 buildings were destroyed. Israel launched a major offensive in Jenin just after the Gaza ceasefire, saying its targeting terrorist infrastructure.

Dozens of Palestinians have been killed in Jenin since this major offensive began, including a two-year-old girl who was shot inside her home.

As Jeremy Diamond now reports, her family is demanding justice.

(BEGIN VIDEOTAPE)

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT (voice-over): Taima al- Khatib's world has been shattered, but she is trying to stay strong. After all, that's what Laila would want.

TAIMA AL-KHATIB, MOTHER OF TWO-YEAR-OLD LAILA AL-KHATIB (through translator): Laila was always the source of my strength.

DIAMOND: Laila was just two years old when she was killed by Israeli troops. One of at least 24 Palestinians killed by Israeli military operations in and around the West Bank city of Jenin in the last two weeks.

The little girl whose laughter once delighted her family, now gone. The family were having dinner when Laila's grandfather heard a faint voice on a loudspeaker that sounded like the Israeli military.

UNIDENTIFIED MALE: The voice was distant, so we didn't pay attention to it. After a few moments, we heard gunfire very close by, closer than the usual. So I asked the girls to hide in their bedroom, and my wife and I hid in our bedroom that faces the street, so we could try to see what was happening.

DIAMOND: And you lay down.

Inside that bedroom. Laila's mother, Taima, grabbed her daughter and cradled her on the ground.

UNIDENTIFIED MALE: And in that moment, shots were fired toward us. So my wife and I ducked and fell to the ground. And then I heard my girl screaming from inside the bedroom.

DIAMOND: The screams were Taima's. Laila had been shot in the head.

AL-KHATIB: My blouse, this whole area was filled with blood. So I started screaming, saying Laila, something hit her and she's bleeding. They came quickly and grabbed her from me so they could take her outside to call the ambulance.

DIAMOND: Bassam rushed outside with Laila in his arms, where he found dozens of soldiers. They had surrounded his house. Some had taken up positions on a neighboring roof.

UNIDENTIFIED MALE: I looked at one of the soldiers and asked him, why you are killing my daughter. He was a bit stunned and saw the girl bleeding and then said, I am sorry.

DIAMOND: He's --

UNIDENTIFIED MALE: He's saying I'm --

DIAMOND: He said, I'm sorry.

UNIDENTIFIED MALE: I'm sorry. I told him my child is bleeding. She needs help. What do you mean I'm

sorry?

AL-KHATIB: I wanted to hold the soldier and scream out to the world and say that he killed a young child, and he burnt the heart of a mother. Any mother like me who had to endure this and then have a soldier say, I'm sorry, it's as if nothing happened.

[15:50:04]

The man who fired at Laila for no reason has to be prosecuted and punished. And not just him, anyone who was involved -- from the commanders, from the army who encircled the house.

DIAMOND: The Israeli military said it opened fire on the house after receiving intelligence about, quote, barricaded armed terrorists, and claimed they called on people to leave the building multiple times. Immediately after they opened fire, the soldiers identified injuries among uninvolved civilians who were present in the structure, and coordinated the rapid arrival of the Red Crescent to evacuate them.

The IDF regrets any harm caused to uninvolved civilians and takes various measures to prevent such incidents. The incident will be examined and lessons will be learned accordingly.

Gunfire didn't just strike Laila Khatib's home.

These are bullet holes.

Bullets also tore through neighboring apartments where Laila's extended family lives.

UNIDENTIFIED MALE: All kids here, not just in this house. And up there and in my brother's house. Their kids, like this.

DIAMOND: They must have been really afraid.

UNIDENTIFIED MALE: Yeah, of course.

DIAMOND: After the gunfire ended, multiple residents accuse Israeli forces of trying to cover up what happened, destroying several security cameras in the area.

This video, obtained by CNN shows a soldier trying to knock down a security camera on the same street with the butt of his rifle. The military did not respond to CNN's questions about the destruction of security cameras.

In a home riddled with bullets, all that is left now are the memories.

UNIDENTIFIED MALE: She would hop on my shoulders and she would say, grandpa, I want to kiss your head. And she would hug me. I used to love this.

DIAMOND: And a mother's duty to speak out for her daughter. AL-KHATIB: I want everybody to know Laila and her story and how they

killed a young child who was so ambitious, so smart. This is my duty to her.

DIAMOND: Jeremy Diamond, CNN, Jenin, the West Bank.

(END VIDEOTAPE)

SOARES: We'll be back after this short break.

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(BEGIN VIDEO CLIP)

TAYLOR SWIFT, MUSICIAN: And the Grammy goes to -- Cowboy Carter.

(CHEERS)

(END VIDE CLIP)

[15:55:08]

SOARES: A really stunned Beyonce as you saw there, making history last night at the 67th Grammys becoming the first Black woman to win best country album and winning her first album of the year both for Cowboy Carter. With last night's wins and a new viral reaction video, the "Texas Hold 'Em" singer now has, get this, 35 Grammys to her name, the most by any artist in history.

And, of course, there were other big moments during music's biggest night. Have a look at this.

(VIDEO CLIP PLAYS)

SOARES: Charli XCX's the "360" singer whose album Brat, of course, took over pop culture in our lives, of course, on social media last summer or Brat summer, as you might recall, took home her first three Grammy awards, including best dance electronic album. You can see why, very catchy.

Rapper Kendrick Lamar swept his categories for record of the year and song of the year for his diss track "Not Like Us".

And rising stars Chappell Roan and Sabrina Carpenter also got their dues last night, challenging the Grammy for best rap album. Chappell Roan for best new artist, and Sabrina Carpenter landing the best pop vocal Grammy for her album Short and Sweet, which gave us, of course, some of the summer's biggest hits.

Quite a triumphant year, of course, for the music industry. Also raising money, importantly, last night for the Los Angeles wildlife relief, incredibly important indeed.

Thanks for your company.

"QUEST MEANS BUSINESS" is next.