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CNN International: China Announces Retaliatory Tariffs On Some U.S. Goods; El Salvador Offers To House U.S. Criminals And Deportees; Dem. Lawmakers: Trump's Takeover Of USAID Is Illegal, Dangerous. Aired 11a-12p ET
Aired February 04, 2025 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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ELENI GIOKOS, HOST, "CNN NEWSROOM": Hello, and welcome to our viewers from around the world. I'm Eleni Giokos in Dubai.
Ahead on CNN Newsroom, Trump's tariff war, China announcing it will retaliate after President Trump's tariffs go into effect. We'll look at what this means for global markets. Plus, for the first time since he returned to office, President Trump is welcoming a foreign leader to the White House, Israel's Prime Minister visiting amid uncertainty about the next stage of the ceasefire with Hamas. And moments ago, Robert F. Kennedy Jr.'s nomination was advanced by the Senate Finance Committee. We'll have the latest from the U.S. Capitol.
Welcome to the show. Great to have you with us, and we begin with the start of what could be a new trade war between the United States and China, the two biggest economies on the planet. Beijing says it will slap retaliatory tariffs on some U.S. imports, after President Trump's 10 percent tariff on Chinese imports went into effect. These new tariffs from China, which are scheduled to begin next week, apply to U.S. crude oil, agricultural machinery, and liquefied natural gas. Chinese officials also vowing to file a complaint with the World Trade Organization, while Trump is signaling to Beijing that he is prepared to hit China even harder to get what he wants.
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DONALD TRUMP, PRESIDENT, UNITED STATES OF AMERICA: We'll have some good meetings with China. We have meetings planned, and we'll see what happens. But, that was just a -- an opening salvo. If we can't make a deal with China, then the tariffs will be very, very substantial.
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GIOKOS: This follows a major pause in Donald Trump's trade war with Mexico and Canada. He struck deals with both countries to pause imminent tariffs on Monday. That's after the threat caused U.S. markets to tank for the next 30 days. Those tariffs are on hold, even though President Trump had insisted last week that nothing would stop them from kicking in. However, the White House claimed on Monday that it was Canada and Mexico, quote, "bending the knee". Let's turn now to Anna Stewart, who is in London. So much happening on
tariffs, and really hard to actually keep up with all of this, because it's a lot of tit for tat. But, I want to talk about China's response to the tariffs with the basket of goods that have been impacted. Frankly, China has a lot of leverage when it comes to critical minerals, and it's notable that it didn't use that as retaliation.
ANNA STEWART, CNN CORRESPONDENT: Yes. This has been a really interesting beginning, as Donald Trump said, the President said an opening salvo, really, to the trade war. We had the drama of the pauses with Canada and Mexico. But, this is really quite a slow start, 10 percent tariffs from the U.S. on China on top of any tariffs that exist. But, of course, during the campaign, at one stage, the President was talking about 60 percent tariffs on China.
And as you say, when we look at the retaliation, and of course, there has been a retaliation, it's perhaps not as dramatic as you might expect. It's targeted, and it's quite muted. So, as you said, tariffs on things like coal, LNG, which China actually gets elsewhere as well, for instance, Russia, 10 percent of crude oil, agricultural machinery. We have export controls on some metals, but as you say, not all of the sort of critical raw materials that China does export to the U.S. They've singled out things like tellurium, which is used to make solar cells, tungsten, which can be used in defense and industry.
And adding two firms to the Chinese unreliable entities list, we have Illumina, which is a biotech firm which does gene sequencing, I believe their shares are trading down today, and also fashion retailer PVH Group, now, they own things like Calvin Klein, Tommy Hilfiger, also trading lower. It's quite rare for U.S. companies be added to this list when they already have a presence in China. So, it's really unclear what that will mean for those businesses. And you can see there that investors are concerned, but perhaps not quite sure what it will mean for the future.
But, I would say, this is an opening salvo. It was more muted than we expected. It's not that dramatic, but of course, that means that there is both room for negotiation, but also increased tariffs going forward.
GIOKOS: Yeah. And let me tell you, the markets will always speak their minds. So, perhaps that would be one way to sort things out. No one wants to see their stock markets come under pressure.
I want to talk about Europe. It is bracing for tariffs. It is a threat coming through from Donald Trump. How are policymakers preparing?
STEWART: Well, it's been a very interesting day. We've had trade ministers from the EU, all meeting for an informal meeting in Warsaw, and that has just wrapped up, and there has been a press conference, and I'm just going through some lines.
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The EU trade commissioner saying, we benefit fully from this unique bond with the U.S., and there is nothing unfair in it. Of course, the accusation for President Trump is this is a very unfair relationship, and that the EU exports far too much to the U.S. and doesn't import enough, the trade deficit, and actually the U.S., at least Donald Trump and the EU, they really disagree on what that trade deficit is. So, the President has said it is $350 billion. The EU says it's only $50 billion. But, the question is, Eleni, what are they going to do? Trump 1.0, the EU retaliators. So, we had President Trump putting tariffs on things like European steel and aluminum, the EU, tit for tat, tariffs on Levi's jeans, bourbon whiskey, Harley-Davidsons.
2.0, what's going to happen? Because looking at the negotiations with China and Mexico, perhaps they will strike a more conciliatory tone. In the past, we've had comments just in the last few months, actually, from the European Central Bank President Christine Lagarde, and she spoke about perhaps a checkbook strategy, just buy more agricultural produce, for instance, from the U.S., and perhaps that will be enough.
GIOKOS: I also suspect, in the coming months, we'll see the WTO being inundated with the plethora of complaints. So, we watch this very closely.
Anna Stewart, great to have you with us. Thank you.
Well, U.S. Secretary of State Marco Rubio is expected to speak in Costa Rica this hour, the latest stop of his tour of Central America. On Monday, in El Salvador, he announced what he is calling an unprecedented potential deal between the two countries. El Salvador has agreed to house deportees from the United States along with violent convicted criminals, even if they are U.S. citizens. Salvadorian President Nayib Bukele says it's an opportunity for the U.S. to, quote, "outsource its prison system in exchange for a fee."
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MARCO RUBIO, U.S. SECRETARY OF STATE: He has agreed to accept for deportation any illegal alien in the United States who is a criminal, from any nationality, be they MS-13 or Tren de Aragua, and house them in his jails. And third, he has offered to house in his jails dangerous American criminals in custody in our country, including those of U.S. citizenship and legal residents. No country has ever made an offer of friendship such as this.
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GIOKOS: Now, it's not clear whether the Trump administration will take El Salvador up on the offer, though any effort to deport incarcerated U.S. nationals to another country could be met with legal challenges.
For more now, we've got CNN contributor Stefano Pozzebon in Bogota. Great to have you with us. It does sound like an unprecedented deal. Take us through what's on the table right now for the U.S. and for El Salvador.
STEFANO POZZEBON, CNN CONTRIBUTOR: Yes, Eleni. Well, there are more questions than answers right now on the table, most of them concerning, just like you said, the legality of this deal that was announced yesterday, really by social media and quick remarks to the press. The idea is that the United States would deport to El Salvador both undocumented migrants of both Salvadorian origin and other nationality, because El Salvador would be deemed a third safe country, and the convicts, the criminals were made members of international criminal gangs like the Tren de Aragua, which seem to be a focus of the White House in these past two weeks, at least since the inauguration.
But, definitely a lot of questions. One thing is to, of course, deport undocumented migrants, and other is to simply house thousands of completed criminals into a foreign penitentiary system. So, we'll be back to report.
One thing for sure is that Bukele, the President of El Salvador, is very happy that this deal is coming to fruition because it, of course, reinforces his image as a tough on crime, and I quote, "leader in the Americas." Eleni.
GIOKOS: All right. So, take us what's in it for El Salvador. There is a fee involved. So, clearly, we're talking about a monetary transaction here.
POZZEBON: Sure. Monetary is not secondary, to think about it as a business deal. Both Bukele le and Donald Trump are transactional people. They are both came from a business background. So, I wouldn't be surprised if that fee turns out to be substantial. At the end of the day, any country that receives back thousands of migrants from the United States will have to give up a lot of remittances that this population bring down to Central America.
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But this, I think, has more to do with the image that Bukele has tried to portray over the last couple of years around the world, a tough-on- crime image, a person who has sent tens of thousands of alleged gang members into prison, and that, of course, brings us and opens up more and more question about the role that we want prisons to play in a society. Take a listen to what an expert on El Salvador told me this morning.
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PROF. SONJA WOLF, UNIVERSIDAD PANAMERICANA DE MEXICO: But, of course, we can also ask broader questions about the purpose of prisons in El Salvador and anywhere in the world, really, because do you consider the role of prisons to be one of punishment or one of rehabilitation and reintegration? And it's really the second aspect, the rehabilitation of offenders and their reintegration into society that has been lacking in El Salvador. So, if you want to simply keep people in prison, essentially warehousing them, you can do this. But, what will be the cost of this?
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POZZEBON: And Eleni, of course, the White House is not looking at the long-term consequences of the idea of sending Venezuelan gangsters into Salvadorian prison in the long term. This is clearly a strategy to tackle the problem as deeply as possible and as fast as possible, Eleni, but, of course, the questions for what would happen to other countries in this region, this complex region, remain -- a lot of them unanswered. Eleni.
GIOKOS: Absolutely. Stefano, great to have you with us. Thank you so much, Stefano Pozzebon there for us.
Well, Secretary of State Marco Rubio is also taking on the new role of acting Director for USAID, amid concerns the Trump administration, with an assist from Elon Musk, wants to shut the humanitarian agency down. More than a week ago, Rubio outlined a freeze on almost all foreign assistance, and now he is confirming the de facto takeover of the U.S. Agency for International Development by the State Department. Take a listen to America's top diplomat's criticism of USAID.
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RUBIO: It has to be aligned with American foreign policy. USAID has a history of sort of ignoring that and deciding that there is somehow a global charity separate from the national interest. These are taxpayer dollars.
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GIOKOS: All right. The move has raised alarm among Democrats who argue it is not legal for President Trump to shutter a federal agency without consulting Congress.
CNN's Jennifer Hansler is tracking the thousands of American jobs that are at risk, and she joins us now from the U.S. State Department. Jennifer, good to see you. Give us a sense of what jobs are we talking about here, the number and importantly, are the Democrats going to pursue a way to halt the unraveling of USAID?
JENNIFER HANSLER, CNN STATE DEPARTMENT REPORTER: Well, Eleni, these are thousands and thousands of jobs that impact basically every corner of foreign assistance, and many and many of those jobs are based here in the United States. Now, aid organizations, the contractors and the USAID were already reeling from this sudden freeze on foreign assistance, because not only did it put a stop on future work, it also put an immediate stop to most of the projects there were ongoing, as well as the disbursements of cash to these organizations. This means that they have not been able to pay their workforce.
So, we have already heard thousands of people being furloughed and laid off to this point just because of that freeze that went into place less than two weeks ago. A source familiar with one of the trade associations here in D.C. said their members were reporting up to $350 million in unpaid bills from the federal government. That has resulted in 2000 staffers being put on furloughed, and now all of these contractors and organizations are bracing for even further reductions in the workforce if USAID is dismantled.
Secretary Rubio indicated this could be coming when he wrote to lawmakers yesterday, outlining his moves, saying that he had appointed another State Department official to lead a review of the agency that could ultimately lead to it being abolished in some of its projects being moved over to the State Department.
Now, Democrats are saying this move is blatantly illegal. They say USAID was started as an independent federal agency, and they say that is enshrined in U.S. law. And moreover, they say it is Congress that has the power to decide whether to establish or abolish U.S. agencies. Now, one Democratic lawmaker yesterday indicated they would bring this to the courts, but it's unclear when they might be able to make a move, and how quickly if they bring this in front of a judge, whether there could be any action to try to stop what is going on. But, right now, people are reeling for the potential impacts that this could have both here and abroad on foreign assistance as well as the economy. Eleni.
GIOKOS: All right. Jennifer Hansler, thank you so much for breaking that down.
Well, we're also tracking two votes on Capitol Hill, where committees are considering Trump's picks to lead the Department of Health and Human Services and the Office of National Intelligence.
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A short time ago, Robert F. Kennedy Jr.'s nomination was approved by the Senate Finance Committee. His nomination now advances to the Senate floor. Later, the Senate's Intelligence Committee will vote on whether or not to move Tulsi Gabbard's nomination forward.
CNN's Lauren Fox is keeping a close eye on these Committee votes, and she joins us now from Capitol Hill. Lauren, good to have you with us. Look, despite the pushbacks we saw on RFK's vaccine stance, the vote for him was along party lines. What else can you tell us?
LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Yeah. I mean, there was so much suspense going into this morning because it was unclear how Senator Bill Cassidy, a Republican from the state of Louisiana, was going to be voting on this nomination, but just a short time ago, he announced that he was voting yes, and then it followed very swiftly in Committee that this was just a party line vote, Republicans voting to confirm Kennedy out of their Committee and advance him to the Senate floor. Democrats voting in unison against the nomination.
Cassidy is a position, and he has made clear over the course of the last several weeks that he had serious concerns about some of Kennedy's past positions and commentary when it came to vaccines. There was also this really rough exchange on the first day of Kennedy's testimony where Bill Cassidy, who has spent his time in Congress, really trying to nail down reforms to Medicaid, asked this man, who was nominated to be the in charge of Medicare and Medicaid, what he would do to make reforms to those programs, and Kennedy seemed extremely confused about the differences between those two programs. He didn't really seem to be well versed in the nuances of those programs, which are really important to millions of Americans across the country.
In his statement, Cassidy said, quote, "I've had very intense conversations with Bobby and the White House over the weekend and even this morning. I want to thank VP J.D. specifically for his honest counsel. With the serious commitments I've received from the administration and the opportunity to make progress on the issues we agree on, like healthy foods and a pro-American agenda, I will vote yes."
Now, there is also a very important vote happening in the Senate Intelligence Committee in just a couple of hours. Again, we were watching Senator Todd Young very closely, a Republican from the state of Indiana, because he had not announced where he was. But, just a short time ago, he too released a statement saying that he will support Tulsi Gabbard's nomination to get out of Committee. That means that two of Donald Trump's most controversial nominees, Tulsi Gabbard for the Director of National Intelligence, RFK Jr., for the Secretary of Health and Human Services, they have now -- we expect both of them to advance out of Committee and get a vote on the Senate floor in short order.
GIOKOS: All right. Lauren Fox, thank you so much for that update. Things moving along quite swiftly, it seems, for these two nominations.
All right. Stay with us. Senator Bill Cassidy is expected to speak later in the hour about his decision to vote to advance Robert F. Kennedy Jr.'s nomination. We will bring you that once it happens, live right here on CNN.
And we are continuing to follow breaking news out of Sweden, where five people have been shot at a school in Orebro. That is about 150 kilometers west of Stockholm. Police say the suspect may be among the injured, and they're urging the public to stay away from the area and remain indoors. You're seeing live pictures right now coming through. And as the operation is ongoing, we will bring you the latest updates as soon as we get them.
And still ahead, just days after U.S. President Trump suggested cleaning out Gaza, evicting Palestinians, he is rolling out the red carpet for Israeli Prime Minister Benjamin Netanyahu at the White House. And then we'll look at the challenges that lie ahead for the Gaza ceasefire and hostage deal, as it enters a critical new phase.
We'll be right back.
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GIOKOS: Welcome back. In just hours from now, a critical meeting will take place at the White House that could have repercussions across the Middle East. President Donald Trump is welcoming Israeli Prime Minister Benjamin Netanyahu today, his first meeting with a foreign leader since the inauguration. Mr. Netanyahu says Israel's wars have changed the face of the Middle East, and he hopes Mr. Trump can help further redraw the map. Among the expected topics, the Gaza ceasefire and hostage deal, efforts to normalize relations between Israel and Saudi Arabia, and the threat from Iran.
Let's get more now from Kevin Liptak, who is at the White House for us. Kevin, big question about what Netanyahu's agenda could be and basically whether that aligns with President Trump.
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Well, I think that's why Netanyahu is here in Washington, to try and ensure that his agenda going forward does, in fact, align with President Trump, particularly now that negotiations are meant to begin for the second phase of that hostages for a ceasefire deal in Gaza. Netanyahu wants to make sure that he is on the same page with his American counterpart before beginning those negotiations in earnest.
And it was interesting last night in the Oval Office to hear from President Trump about where exactly he sees things standing at this moment. He said that he has no assurances that this ceasefire will hold, which is something of a pessimistic view, especially because President Trump took partial credit for this deal to begin with, which was negotiated before he entered office.
Now, his special envoy to the Middle East, Steve Witkoff, he has been in the region for the last week or so, including a trip to Gaza itself on something of a fact-finding mission. He was standing next to Trump in the Oval Office last night. He offered something of a more optimistic view, saying that he is hopeful, but that this deal will hold. But, I think the one thing that's clear is that this will be the central topic of discussion when Netanyahu arrives here later today. And certainly we did hear that from senior administration officials earlier today, as they were previewing this visit.
But, that is not the only topic of discussion for these two men to discuss. There is also, I think, the question of what happens to Gaza next. It's rebuilding process. Trump has said that he thinks that the strip should be, in his words, cleared out, and that the Palestinians who live there should be moved to Egypt and Jordan. Of course, those countries have said that they don't want to accept Palestinians into their country. That will be a topic of discussion when the Jordanian King is here at the White House next week.
One of the officials that we heard from earlier today tried to lend some more clarity to what the President had been saying. This official says that Trump views Gaza right now as, quote, "a demolition site", that he believes it could take 10 to 15 years to make it livable again, and that it would be inhumane to force the Palestinians who are there now to continuing -- to continue living there in those conditions. So, I think this will be a matter for the men to discuss.
And then there is the question of the broader region, and the question of normalization between Israel and its Arab neighbors, in particular Saudi Arabia. Of course, this was an effort that Trump began during his first presidency, the Abraham Accords. It's something that he very much wants to continue this time around, not least because he thinks it could create a regional bulwark against Iran, which, of course, is also at the center of these talks today, Eleni.
GIOKOS: Yeah. Well, Kevin, thank you so much for giving us an update on this agenda. It's clearly a very complex, big topics and frankly consequential for all those involved. Kevin Liptak for us at the White House.
Let's get some perspective now from H. A. Hellyer. He is a Senior Associate Fellow at the Royal United Services Institute for Defense and Security Studies, and he joins us now. Good to see you.
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Look, there is so much happening right now, but I just want to make a point of what Prime Minister Netanyahu said on his way to Washington. He said that with President Trump, we can redraw the map even further and for the better. How are you characterizing this statement, and what do you think his agenda is while he is in Washington meeting with President Trump?
H.A. HELLYER, SR. ASSOC. FELLOW, ROYAL UNITED SERVICE INSTITUTE OF DEFENCE AND SECURITY STUDIES: So, thank you, Eleni, for having me on the program. Always a pleasure to be here. I think you have to look at how Netanyahu characterized this deal, this agreement, when it was signed. According to Israeli reports, inside of Israel, the cabinet of Benjamin Netanyahu has been instructed not even to describe that as a deal or as an agreement, but as a framework, as an outline. And there are a flow of reports that have come through the Israeli press since this deal was actually signed. They indicate a huge lack of commitment of Netanyahu to follow through with actually ending the war permanently.
Remember, phase one involves certain prisoner exchanges. Phase two is about a complete and total withdrawal of the IDF from Gaza, and significant members of his cabinet have made it very clear that, if that happens, they're gone, and if they're gone, does his government actually survive, or will it be toppled? And then you have to have new elections. These are very serious considerations for Benjamin Netanyahu, and I'm not sure that he has gone to D.C. in order to say, yeah, we want to go forward with phase two, as much as he may well be going to D.C. to see if he can get the Trump administration to agree that actually phase two isn't realistic, and try to redraw phase two in terms of what goes next. That's about Gaza.
Of course, when it comes to West Bank, there is a good deal of support for annexation of parts of the West Bank among the Israeli political right, but also within the Trump administration supporters.
GIOKOS: So, you're saying that phase two of the deal probably won't happen, because that's sort of what would be heard from President Trump, that he can't give any assurances that the ceasefire will hold. So, phase two and phase three of the deal you think will not be occurring. Is that your prognosis?
HELLYER: I think it's incredibly challenging, because phase two means a complete and total withdrawal of Israeli troops from Gaza, and Netanyahu has made it very clear that he believes that all of Gaza should remain as part of Israel's security umbrella, in the sense that they must control the security quotient in Gaza, that the complete defeat of Hamas is a war aim, a primary war aim. How are you going to have that war aim be accomplished if Israel completely withdraws from Gaza? Keep in mind also that in the Trump administration, the National Security Advisor, Mike Waltz, the Defense Secretary, they've made it very clear that they also agree that that Hamas needs to be completely defeated, utterly and so on. How do you reconcile that with actually carrying out phase two?
GIOKOS: Yeah. So, let's talk about some of the rhetoric out of the White House, and President Trump has reiterated cleaning out Gaza, saying that Egypt and Jordan will have to take in Palestinians, and I quote, he says, "because we do a lot for them," and that's in his words. He is clearly talking about support and aid and so forth. So, this isn't a question about if he is going to pressurize them. It's about when that is going to happen. At the same time, they've clearly said that it is going to take 10 to 15 years to make Gaza livable, and it's a demolition site, and Palestinians need to live in a safe space. How do you think this is going to play out while he is negotiating or pressurizing Egypt and Jordan?
HELLYER: So, the Egyptians and the Jordanians came out very forcefully, very strongly against the notion of their being complicit in what is frankly ethnic cleansing of Gaza, of its Palestinian population. They weren't just supported by one or two other countries, but actually the Arab League, the Emiratis, the Saudis, the Qataris. It's very clear there is a huge amount of support for the Egyptian and the Jordanian position. The Egyptian-Jordanian position isn't that they don't want to help the Palestinians. The Egyptian and Jordanian position is that, if you allow for this plan to be executed, it doesn't mean a temporary relocation of Palestinians so they can live in comfortable and dignified --
GIOKOS: Yeah.
HELLYER: -- conditions until they're able to go back home. It means displacement permanently. It means ethnic cleansing, because history shows very clearly that every single time the Palestinians have left their homes in Palestine, they've never been allowed back, the Nakba, multiple times since 1947-1948.
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It's very clear. So, complicity and ethnic cleansing, I think, is a big red line for these governments. And there are other considerations as well, but I think that's an overriding consideration, which is why it's so unpopular in the Arab world right now.
GIOKOS: Yeah. And Hellyer, I also want to ask you about normalization between Saudi and Israel, whether Netanyahu really wants to pursue this, because Saudi Arabia have been very clear about a path to a two- state solution. Signs right now are showing that we're very far away from that. So, what do you think the fate of this is, and what do you think Netanyahu's stance is going to be?
HELLYER: I find it very hard to believe that there is going to be any sort of normalization deal between this current Israeli government and the Kingdom of Saudi Arabia. I think that the Saudis have made it abundantly clear, multiple times, over the past six to 12 months in different ways, but very clearly that they insist on there being the establishment of a Palestinian state, or at least an irreversible path towards one actually being established, and the differences between the two are not terribly huge.
The Israeli government and the current Israeli Knesset has made it incredibly clear, no, there will be no Palestinian state. They regard that as completely off the table. So, there is -- the gap in this regard is just too huge, and I don't think that you're going to see that gap close under this current Israeli government. And keeping in mind, this current Israeli government has a Prime Minister who has been indicted by the International Criminal Court for war crimes, is a government that is on the stage at the International Court of Justice for genocide charges. Saudi Arabia is not going to want to engage in a normalization deal, while these things are so blatant in people's minds, quite clearly.
GIOKOS: Yeah. Well, listen, President Trump said that he wants to be a peacemaker during this term. Let's see if he gets this big challenge that's been going on for many decades right. So, H. A. Hellyer, great to have you with us. Thank you so much.
Well, the U.S. and China are now locked in a brand new trade war. Will the European Union be Donald Trump's mixed tariff target? Reaction from the EU, that's coming up next. Stay with CNN.
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GIOKOS: Welcome back. You're watching CNN Newsroom. I'm Eleni Giokos live in Dubai.
The top two economies in the world are now in the early stages of a trade war. China has fired back at the U.S. with retaliatory tariffs after President Trump's 10 percent tariff on Chinese goods.
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China's tariffs apply to certain American products like crude oil, liquefied natural gas, and agricultural machinery. They're set to begin on Monday. And they come amid Monday's pause on tariffs on Canada and Mexico, after calls with Prime Minister Trudeau of Canada and President Sheinbaum of Mexico. President Trump agreed to delay tariffs for 30 days after previously vowing that nothing would stop them. The European Union, pardon me, is also bracing for possible U.S. tariffs while preparing for what will likely be tough negotiations with the United States.
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URSULA VON DER LEYEN, PRESIDENT, EUROPEAN COMMISSION: We want to focus on strengthening the economic ties that deliver for Europeans, those that help to create jobs, bring down prices, and strengthen our security. And that is, of course, the case when it comes to the United States, a country with which we have the strongest of ties. The transatlantic partnership has been the cornerstone of peace and prosperity for the best part of the century. We share many of the same preoccupations, whether on regional stability or the global economy. No other economies in the world are as integrated in such an advanced way as the European Union and the United States.
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GIOKOS: Well, a lot to discuss with Justin Wolfers, Professor of Economics and Public Policy at the University of Michigan. Sir, really great to see you. We just heard from Ursula von der Leyen. They're reminding President Trump and the administration, as a whole, of the important ties between the U.S. and Europe and the fact that they're allies and they're intrinsically connected. So, I guess, are we witnessing the start of a global trade war where the United States is even targeting its own allies, its closest friends?
JUSTIN WOLFERS, PROFESSOR OF ECONOMIC AND PUBLIC SAFETY, UNIVERSITY OF MICHIGAN: There is no sense in which it's a global trade war, in the sense that very few countries are looking around the world, saying, who can I put tariffs on? It's an American trade war. The most odd thing about this American trade war, it's the Trump trade war, is that he started off by aiming the economic cannon at our closest neighbors and allies, Canada and Mexico. Relations with China have been strained for a while, but he has promised that Europe is next.
So, one thing to realize, though, we have a great, big, beautiful Earth. We have eight billion people on that Earth, but it looks like President Trump wants to largely disengage 340 million of those people. That still leaves billions of the rest -- people in the rest of the world trading happily with each other.
GIOKOS: Yeah. OK. Good point there. Canada, Mexico, and of course, the U.S. now have placed this 30-day pause on tariffs. We saw markets coming under pressure. Apparently, the private sector have been making calls to figure out what the next steps are. What do you make of those moves towards Canada and Mexico, and whether this was going to be net positive, ultimately, for the United States?
WOLFERS: Right. So, there is two ways of telling this story, and one is a short-term lens and the other is a long-term lens. Here is the short-term lens. The President threatens tariffs. He says he'll take a call. He gets some concessions. Actually, those concessions are effectively Mexico and Canada saying that they're going to do things that they were already doing, and then he takes the tariffs off. So, by the short-term view, nothing just happened.
Longer-term view, what is economics all about? It's about cooperating. It's about forming relationships around the world, finding new markets, finding new trading partners, finding new co-investors. And what the President has shown is the United States, at least, under his leadership, is going to be a far less reliable partner. So, if you're an investor or even a consumer in any other part of the world, you're always looking for a good economic dance partner. But, if you get a better offer, the United States has just shown that it may --
GIOKOS: So, who is going to fill --
WOLFERS: -- not be there for you when you want them. GIOKOS: So, who is going to fill that void, do you think? I mean,
there is a lot of talk that China is going to come and fill in that void, when, as you say, if you're not a reliable partner, uncertainty creates a lot of jitters in the private sector.
WOLFERS: So, I think one of the things to realize is, you could think about this through a geopolitical lens, who is going to fill the void, but really --
GIOKOS: Yeah.
WOLFERS: -- the global economy is a whole lot of people like you and me and the companies we work for, trying to find folks to do business with. The United States has shown itself to be less reliable. People are still going to trade with the United States, absolutely, but at the margin, folks are going to move away from that. They're going to move to whoever is best for them. So, that might mean a little bit more trade between Europe and Canada, or between Australia and Europe, and so on like that.
[11:40:00]
I'm not sure you want to think of it as being one big geopolitical strength. Now, by the same token, if the U.S. becomes less central and more isolated in the global trading system, it does mean everyone else is more central. The European Union is, China is, Asia is, and so on.
GIOKOS: Yeah. And let's not forget the global south, of course. Beijing responding to Trump tariffs, and some say it was perhaps a bit muted. But, we mustn't forget that the leverage that China has, because it does control around 60 percent of critical mineral production, and that's really significant. Do you think that this could escalate further, that we're talking about a further confrontation?
WOLFERS: Well, we've seen this movie before. Trump was President once before. Trump levied tariffs on China once before. China retaliated and showed that they have an enormous amount of economic might once before. Trump ultimately ended up bailing out U.S. soybean manufacturers and farmers, and Trump and Beijing struck a deal where the U.S. would buy, sorry, China would buy a little -- promised to buy a little more of U.S. goods. But, whether it ended up doing so is not really clear.
GIOKOS: All right. Justin Wolfers, it's great to have you with us. Great chat. Thank you so much.
WOLFERS: My pleasure.
GIOKOS: All right. We're going to a very short break. We'll be back with more news right after this. Stay with CNN.
(COMMERCIAL BREAK)
GIOKOS: All right. Here are some international headlines we are watching today. As Germany enters the final weeks of its election campaign, the man tipped to become the next chancellor and the current leader of the opposition, Friedrich Merz, made it clear that any U.S. measure against the EU would be handled at the, quote, "European level". Merz spoke to CNN's Fred Pleitgen following his Christian Democratic Party's convention, and he addressed not only the threats of President Trump's tariffs, but also vowed stricter immigration policies.
(BEGIN VIDEOTAPE)
FRIEDRICH MERZ, LEADER, CHRISTIAN DEMOCRATIC UNION: Immediately after the formation of a new government, we have to take some decisions on migration. My personal decision would be to control our borders and to return those who are coming without documents. And the second thing is, we have to do something on the economy. The economy in Germany is running pretty bad. And so, we have to take decisions.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: If you become chancellor, you will be dealing with U.S. President Donald Trump, who has already done a lot of wide-ranging decisions, but also threatened tariffs against European nations, of course --
MERZ: Yeah.
PLEITGEN: -- Mexico and Canada as well. How would you deal with Donald Trump as a President?
MERZ: I remind you what happened when he was in his first term. He put in place tariffs against steel and aluminum in America, and the European answer was tariffs against motorcycles, against jeans, and against American whiskey.
[11:45:00]
And the former President of the EU Commission went to Washington, had a deal with him, and after six weeks, they gave up all the tariffs. So, the answer has to come from the European level.
PLEITGEN: Defense is obviously another --
MERZ: Yeah.
PLEITGEN: -- big key issue for Donald Trump, and the five percent goal that he has put forward now. How would you deal with that? I was also very interested in your speech. You also spoke very strongly on the subject of Ukraine --
MERZ: Absolutely.
PLEITGEN: -- as well. I saw.
MERZ: Yeah. I'm very strong in this position. We are on the Ukrainian side, because the attack is against all of us. We have to achieve the NATO goals. This is two percent of our GDP minimum. This is the lowest level. We are behind that. We have to do that. But, my second answer is, don't let us talk about money only. Standardization, simplification and economies of scale have to be put in place as well. So, we have to get more for the money, and the best would be cooperating with the U.S. and with the U.S. government. We do not yet know what they are really planning to do. I would like to see what they are planning to do.
(END VIDEOTAPE)
GIOKOS: Thousands of people are evacuating Santorini, as the Greek island is hit by series of small earthquakes. More than 550 tremors have been recorded in the Aegean Sea, near the popular tourist destination, over the past few days. The strongest, a magnitude of 4.9. Authorities have closed schools and airlines are scheduling additional flights to help people leave.
In the Democratic Republic of Congo, rebel soldiers are calling for a ceasefire starting today amid a growing humanitarian crisis. It comes after rebels claim they captured the eastern city of Goma last week. The UN's Humanitarian Affairs Office warns local healthcare facilities are overcrowded with a growing need for medicine and equipment. The agency says at least 900 bodies have been recovered from the streets of Goma, and it's reporting nearly 2,900 injuries since the end of January.
An arduous and slow recovery mission in the Potomac River, where crews working at the site of last week's deadly aircraft collision in Washington are balancing two critical tasks right now. They are searching for remains of victims within the wreckage, while also extracting parts of the two aircraft from the Potomac River. So far, officials have identified 55 of the 67 victims killed. Meanwhile, we're getting new clues from the American Airlines flight data recorder. The NTSB says it shows the plane's nose came up just before the crash.
President Donald Trump is suggesting a solution to the issue of who owns TikTok. The President said a newly proposed U.S. wealth sovereign fund, well, sovereign wealth fund, rather, could acquire the popular social media app. Mr. Trump signed an executive order to set up the fund. It would be modeled after state-owned investment funds, similar to the ones you see in Norway as well as Saudi Arabia. The proposal could satisfy a bill passed by Congress which demands owner ByteDance sell TikTok, or will be banned in the U.S.
Well, joining us now to explain all of this, we've got CNN's Clare Duffy. Clare, good to see you. What can you tell us about President Trump's plans and whether they will ultimately work?
CLARE DUFFY, CNN BUSINESS WRITER: Yeah. Eleni, this was fairly light in detail, but technically, this could work under this law that requires TikTok to find a non-Chinese owner, or be banned in the United States, provided that its current owner, ByteDance, no longer owns more than 20 percent of the platform and has no operational control of the app once any sort of deal like this is said and done. But, I think setting up a state-backed fund like this, finding somebody to run it, ensuring it has the tens of billions of dollars that would be needed to acquire TikTok is no small task, and TikTok has just 60 days left to find a new owner or be banned in the United States. So, I think that is a big question here. Legal experts have told me there also could be First Amendment
considerations that could change how the platform is managed if it were owned by the U.S. government, because if it's a government-owned platform, any removal of content or even just promotion or demotion of content using the algorithm could fall under First Amendment challenges. Users could challenge that, and that could cause big problems for trying to keep the platform safe and controlled. And then I think there is a question of whether users would continue to stay on this platform, if it is U.S. government-owned. We've heard users already are skeptical of the government's motivation enforcing a sale of TikTok in the first place. Here is a video for you of one user who talked about this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I don't know about y'all, but I don't think too many people want to be on a platform that is owned by the government, that is obviously being monitored by the government.
[11:50:00]
I don't think nobody wants that, and whoever came up with that idea needs to be fired.
(END VIDEO CLIP)
DUFFY: If this deal were to go through, and then users were to flee the platform, advertisers would likely follow, and that could really undermine this potential government investment in TikTok, Eleni.
GIOKOS: All right. Interesting. I want to move on now, and another story that's transpired, Australia banning DeepSeek on government devices over security concerns. Of course, DeepSeek is the new AI model that kind of shocked the world last week. It's a really fascinating story, and now the Australian government is looking deep into this in terms of what it means on its devices.
DUFFY: Yeah. It's a big question, especially because, as you said, we saw DeepSeek really explode in popularity over the past week. For a long time, it was the top app on the Apple App Store. But, the Australian government is now saying that, government workers --
GIOKOS: All right.
DUFFY: -- government agencies --
GIOKOS: Clare, we have to interrupt you. I'm so sorry. Republican Senator Bill Cassidy is speaking now after he voted a short time ago to advance the nomination of RF Kennedy Jr. Let's listen in.
SEN. BILL CASSIDY (R-LA): -- thousands through the office, and I just physically could not.
Now, Mr. President, believe it or not, of these hundreds of people calling me and contacted me, however they did, many of them disagree with each other, diametrically. Three dimensionally, they disagree. But, the unifying factor is that they all desire the best for our country, even though they differ from each other so much, and maybe that kind of frames my feelings about this nomination.
For context, before entering politics, before ever thinking about running from political office, I practiced medicine for 30 years in a public hospital for the uninsured, caring for those who otherwise would not have been able to afford the access to the care that I provided. After seeing patients die from vaccine-preventable diseases, I dedicated much of my time to vaccine research and immunization programs, personally witnessing the safety monitoring and the effectiveness of immunization. Put simply, vaccines save lives.
This is the context that informed me when considering RFK as the nominee to be Secretary of the Department of Health and Human Services. It was a decision I studied exhaustively, I took very seriously, and as I said I would, I spoke with Mr. Kennedy not once, but multiple times over the weekend, including this morning. We had in-depth conversations about the medical literature, about the science behind the safety of vaccines. He referred me to studies and to people. I reviewed them and spoke to those whom he mentioned I should speak to.
Now, the most notable opponents of Mr. Kennedy were pediatricians on the frontlines of our children's health who regularly have to combat misinformation, combating vaccine skepticism with correct information, correct information that comes from their education, their training and experience as physicians. They are aware of the falling vaccine rates and the inevitability of increasing hospitalizations and deaths of children from vaccine-preventable diseases. They are aware that children are now contracting diseases that they would not have contracted if the child was vaccinated.
Now, I heard from others impassioned about the need to address chemicals in our food, and a belief that we are victims of large, impersonal forces maximizing profits while sacrificing our health. And there is evidence for that. Although food safety is principally a USDA concern, I strongly agree that this is an issue society must address. Other RFK supporters are concerned regarding environmental risk. They fear these risks are being ignored by authorities. Mr. Kennedy's history of environmental activism motivates their support. I pointed out that the Environmental Protection Agency monitors this, not the Department of Health and Human Services, but they still feel that he can make a difference.
So, as I looked how to resolve this, I return to where I began. Would it be possible to have Mr. Kennedy collaborate in helping public health agencies earn the trust of the American people? Now, regarding vaccines, Mr. Kennedy has been insistent that he just wants good science and to ensure safety. But, on this topic, the science is good. The science is credible. Vaccines save lives. They are safe. They do not cause autism.
[11:55:00]
There are multiple studies that show this. They are a crucial part of our nation's public health response. But, as someone who has discussed immunizations with thousands of
people, I do recognize that many mothers need reassurance that the vaccine their child is receiving is necessary, effective, and most of all, safe. While I'm aligned with Mr. Kennedy as regards ultra- processed food, reforming NIH and taking on chronic disease, once more, it leaves vaccines.
Now, Mr. Kennedy and the administration reached out seeking to reassure me regarding their commitment to protecting the public health benefit of vaccination. To this end, Mr. Kennedy and the administration committed that he and I would have an unprecedentedly close collaborative working relationship if he is confirmed. We will meet or speak multiple times a month. This collaboration will allow us to work well together and therefore to be more effective.
Mr. Kennedy has asked for my input into hiring decisions at HHS beyond Senate-confirmed positions, and this aspect of the collaboration will allow us to represent all sides of those folks who are contacting me over this past weekend. He has also committed that he would work within current vaccine approval and safety monitoring systems, and not establish parallel systems. If confirmed, he will maintain the Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices' recommendations without changes. CDC will not remove statements on their website pointing out that vaccines do not cause autism.
Mr. Kennedy and the administration also committed that this administration will not use the subversive techniques used under the Biden administration like "sue and settle" to change policies enacted by Congress without first going through Congress. Mr. Kennedy and the administration committed to a strong role of Congress. Aside from he and I meeting regularly, he will come before the Health Committee on a quarterly basis if requested. He committed that the Health Committee chair, whether it's me or someone else, may choose a representative on any board or commission formed to review vaccine safety.
If he is confirmed, HHS will provide a 30-day notice to the Health Committee if the agency seeks to make changes to any of our federal vaccine safety monitoring programs and Health Committee will have the option to call a hearing to further review.
These commitments, and my expectation that we can have a great working relationship to make America healthy again is the basis of my support. He will be the secretary, but I believe he will also be a partner in working for this end. If Mr. Kennedy is confirmed, I will use my authority as Chairman of the Senate Committee with oversight of HHS to rebuff any attempt to remove the public's access to lifesaving vaccines without ironclad, causational scientific evidence that can be accepted and defended before the mainstream scientific community and before Congress. I will watch carefully for any effort to wrongfully sow public fear about vaccines between confusing references of coincidence and anecdote.
But, my support is built on assurances that this will not have to be a concern, and that he and I can work together to build an agenda to make America healthy again. We need a leader at HHS who will guide President Trump's agenda to make America healthy again. Based on Mr. Kennedy's assurances on vaccines and his platform to positively influence Americans' health, it is my consideration that he will get this done. As I've said, it's been a long, intense process, but I've assessed it as I would assess a patient as a physician.
Ultimately, restoring trust in our public health institution is too important, and I think Mr. Kennedy can help get that done. As chairman of the Senate Committee with oversight authority of his position, I will do my best to make sure that that is what we accomplish. I want Mr. Kennedy to succeed in making America healthy again. His success will be tied to the health of our nation. He has the opportunity to address the most pertinent issues affecting Americans' health.
We also need to reform institutions like FDA and NIH. And those, as already been indicated, are my priorities as Chairman of the Health Committee. I look forward to his support in accomplishing this. If confirmed, I look forward to working together with Mr. Kennedy to achieve President Trump's mission of improving the health of all Americans. And with that, I yield.