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Tariff Turmoil Roils Markets; Trump Calls On Cabinet To Manage Cuts; Europe Charts Its Own Course. Aired 5-5:30a ET

Aired March 07, 2025 - 05:00   ET

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

[05:00:37]

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I'm not even looking at the market because long term, the United States will be very strong.

UNIDENTIFIED MALE: A whiplash in trade policy here at the White House has sent the stock market reeling.

PAULA NEWTON, CNN CORRESPONDENT: Donald Trump says he'll begin holding biweekly cabinet meetings to confer with Elon Musk about cuts being made to government.

TRUMP: If they can cut, it's better. And if they don't cut, then Elon will do the cutting.

JOHN VAUSE, CNN ANCHOR: The European leaders, what was once a distant concern, now seems to be reality. U.S. commitment to their defense is no longer a rock solid guarantee.

ROBERTA METSOLA, EU PARLIAMENT PRESIDENT: Europe is capable of standing up on its own two feet.

(END VIDEO CLIP)

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RAHEL SOLOMON, CNN ANCHOR: Hello, and a warm welcome to our viewers joining us from the U.S. and all around the world. I'm Rahel Solomon. It is Friday, March 7th, 5:00 a.m. exactly here in New York.

And it's been a rocky week for Wall Street as investors grapple with uncertainty amid U.S. President Donald Trump's foreign trade war. The Dow Jones losing nearly 1 percent on Thursday. The Nasdaq composite sliding more than two and a half points, and the broader S&P 500 falling as well.

Let's take a look at where futures stand today. Well, this is a nice sight, green across the board, 3-1/2 hours before the all important February jobs report. We'll see how that impacts the markets.

But these numbers come as Mr. Trump announces new trade concessions. He now says that he will delay tariffs on more Canadian and Mexican products until April.

CNN's Jeff Zeleny has more.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN CHIEF U.S. NATIONAL AFFAIRS CORRESPONDENT: A whiplash in trade policy here at the White House has sent the stock market reeling for the last several days. President Trump adjusting course on the Canada and Mexico tariffs, specifically offering on Thursday yet another month long reprieve, a day after he offered automakers a similar reprieve.

Now, there is no question the financial markets have been wondering what exactly this White House is up to, as the stocks have fallen. The dollar has weakened and there's been an inconsistent pattern across many of these decisions.

But the president on Thursday insisting the market had nothing to do with it.

TRUMP: No, nothing to do with the market. I'm not even looking at the market because long term, the United States will be very strong with what's happening here.

ZELENY: Of course, that is very much an open question. The president has long used the stock market in the financial markets as a whole, as a metric for how he guides his success. He certainly did so during the first term in office. And he has, throughout the course of much of his life.

But there is no doubt the president is also still in favor of imposing some type of tariffs, he believes, and he said again Thursday at the White House, that the United States is being ripped off, in his words, by some of these countries.

He's also insisting that reciprocal tariffs will go into effect on April 2nd, and that would really cover the gamut of goods, from autos to alcohol to so many other things, and not just Canada and Mexico. It's all reciprocal tariffs. Any country the United States does business with.

So the bottom line to all of this, the questions here now is the president has delivered a series of threats over tariffs, but taken many of them back. Is he serious about the next round? Of course, we'll have to wait and see on that as the markets still wonder what this White House is up to.

Jeff Zeleny, CNN, the White House.

(END VIDEOTAPE)

SOLOMON: And President Trump's latest trade move applies to goods covered by the existing free trade deal between the three nations. That's the U.S., Mexico and Canada agreement. It was proposed by President Trump during his first term and officially replaced the North American Free Trade Agreement in 2020. Now, amid the tariff threats, the leaders of Mexico and Canada have

been in talks with Trump.

(BEGIN VIDEO CLIP)

JUSTIN TRUDEAU, CANADIAN PRIME MINISTER: I can confirm that it was a colorful call. I've been having conversations and working with Donald for over eight years now, and a lot of it is rolling with it.

CLAUDIA SHEINBAUM, MEXICAN PRESIDENT: So I said to him, we are getting results. President Trump, now that you put in the tariffs, how are we going to continue cooperating and collaborating with something that hurts the people of Mexico?

(END VIDEO CLIP)

SOLOMON: Meanwhile, the president has been imposing fresh tariffs on China while expressing hope of building good relations. But now China says that such a, quote, two faced approach would fail. On Friday, Beijing warned against world powers prioritizing their own interests.

[05:05:06]

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WANG YI, CHINESE FOREIGN MINISTER (through translator): There are more than 190 countries in the world. Should everyone stress my country first and obsess over a position of strength? The law of the jungle would reign again. Smaller and weaker countries would bear the brunt first, and international norms and order would take a body blow.

(END VIDEO CLIP)

SOLOMON: In the meantime, Donald Trump says that he will begin holding bi-weekly meetings to confer with Elon Musk and his cabinet about cuts being made to the government. The president says that he wants cabinet leaders to use, quote, the scalpel rather than the hatchet, and keep what he calls the best and most productive people.

(BEGIN VIDEO CLIP)

TRUMP: I want the cabinet members go first. Keep all the people you want, everybody that you need. And it would be better if they were there for two years instead of two weeks, because in two years, they'll know the people better. But I want them to do the best job they can when we have good people. Elon and the group are going to be watching them, and if they can cut, it's better. And if they don't cut, then Elon will do the cutting.

(END VIDEO CLIP)

SOLOMON: And Senate Republican leader John Thune says that he's trying to get clarification about a reported 70,000 layoffs coming at the Department of Veterans Affairs. Thune says that he thinks that cabinet members should take the lead on staffing decisions at their agencies. (BEGIN VIDEO CLIP)

SEN. JOHN THUNE (R-SD): This is why we work so hard to get cabinet people in place is hand it off to these leaders, these managers who are going to be making decisions and they're going to be, I think, probably better attuned to the individual program --

DANA BASH, CNN HOST: Do you feel that -- is he going to do that?

THUNE: And I think that's a conversation that we'll have.

(END VIDEO CLIP)

SOLOMON: Meantime, fellow Republican Senator Lisa Murkowski is criticizing Trump's plan to eliminate USAID, saying that she's had conversations with agency employees that paint a, quote, troubling picture of what the world looks like without humanitarian aid from the U.S.

President Trump has said that the agency is run by, quote, radical left lunatics.

The Trump administration is trying to stop a flood of emergency lawsuits against it by invoking a little known rule that requires upfront payment when filing a suit.

A new White House memo says that, quote, it is the policy of the U.S. to demand that parties seeking injunctions against the federal government must cover the costs and damages incurred if the government is ultimately found to have been wrongfully enjoined or restrained.

Now, it comes as the administration suffers a string of defeats in the courts. On Thursday, a judge overturned the dismissal of the chair of the National Labor Relations Board. That's the third time that a firing has been deemed unlawful within a week.

But another official is abandoning his challenge. Special counsel Hampton Dellinger says that he is unlikely to win at the Supreme Court and is dropping his case to remain in his role.

The Social Security Administration is telling employees that they are not allowed to look at news websites while at work. A memo obtained by CNN says that employees are prohibited from accessing general news, sports and online shopping sites on work issue devices, and that's effective immediately. The agency claims that it will reduce risk and protect sensitive information.

Certainly a lot to get to. For more now, let me welcome in Kadia Goba in Washington. She is a politics reporter for "Semafor".

Kadia, great to have you this morning.

So far in the presidents term, we haven't seen a lot of public GOP dissent on Trump's plans. But -- but on this issue of tariffs, you are hearing GOP leaders raise concerns. Listen.

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SEN. RAND PAUL (R-KY): Almost every industry in Kentucky has come to me and said it will hurt our industry and push up prices of homes and cars. And so I'm going to continue to argue against tariffs.

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Should he back off of it, if it goes, if it starts to hurt your constituents?

SEN. THOM TILLIS (R-NC): When we start losing you back off. You know, there's such a thing as a strategic retreat. At the end of the day, I think we have more leverage than any other nation. But we've got to be smart and we don't have all the leverage.

(END VIDEO CLIP)

SOLOMON: So, Kadia, what do we know about the why of it all? I mean, is this a strategic retreat or what's the strategy here?

KADIA GOBA, POLITICS REPORTER, SEMAFOR: So this isn't new. My colleagues and I have reported this out before. The president took office, there were major concerns about tariffs, whether lawmakers said it openly or just talked about him using it just as a threat or a form of negotiation.

Now, we see it being more openly or them being more openly criticized -- criticizing the president. And it's because one, I would say the poll is -- polling is not looking great, but also some of these tariffs are impacting lawmakers constituents already, and they have to receive the phone calls from their -- their constituents.

SOLOMON: Yeah. And just staying on the issue of the economy in about 3-1/2 hours, a little less than 3.5 hours, we get the latest jobs numbers. It's the first one under his presidency. Now, it might be too early to see the impact from the DOGE cuts in this report.

But how does Trump play this today?

[05:10:01]

I mean, if you come out and you celebrate these strong numbers today, you might be forced to own them next month if they're lower because of DOGE or concerns about tariffs, and they start to show up in the data. So how does he play this later today?

GOBA: Yeah, this was very -- it's -- it's interesting how this will play out. I'm not really clear. I had the same question during the joint address the other day. When you come to Washington, D.C. and you talk to members of Congress who have constituents and who, excuse me, and who talk about who -- and you and you talk about all the layoffs that you have, especially for members, representing Virginia and Maryland. How does that look on television when they're cheering? It's not a great situation. And I would imagine the markets are even going to dictate some of the decisions coming out of the White House.

SOLOMON: Yeah, I mean, we know -- I mean, he says he's not watching it closely now because the markets will move higher in the long term. But we know in the past he has watched the markets pretty closely.

I'm turning to that meeting yesterday of Trump and some of his cabinet members, Elon Musk of course, being there, I mean, this is being viewed as one of his first acts, one of Trump's first acts of reining in the power that Musk has in Washington. How significant is this, and do you think it's a sign of more to come?

GOBA: I do think it's significant -- significant. I think that the White House is already getting pushback about the layoffs. They understand, excuse me. They understand that it was indiscriminate.

And because of that, you know, some of as one member pointed out to me the other day, it doesn't make sense to take away probation -- probationary people coming in who are younger, who are just have more energy and more ambition to cover a job. When you have people who have been there for a long time and are probably used to not coming to work or, you know, just really aligned with some of the pre- or the COVID -- COVID regulations that were imposed.

Would that allow agency workers to stay home? It just didn't make sense. And, you know, while it made a lot of headlines, it just doesn't work for the specific agencies.

So we saw, you know, President Trump saying that his -- his cabinet will be responsible themselves for pulling in or making some of these hires and fires. It just -- it makes sense now at this point, because I think that he's just getting a lot of criticism.

SOLOMON: Yeah. And apparently there will now be biweekly meetings. So, you know, this is likely perhaps fluid. Well learn more and see how this develops.

Kadia Goba, we appreciate you waking up early to be with us. Thank you.

All right. Train travel from Paris to London in northern France has been suspended this morning after an unexploded World War II bomb was found on tracks leading to France's busiest station, the Gare du Nord.

A spokesperson for the state owned railway company says that the bomb is huge and could be a serious threat to people's lives.

Let's get to CNN's Melissa Bell, who is covering all of this from the Gare du Nord station.

Melissa, what's the latest there?

MELISSA BELL, CNN SENIOR INTERNATIONAL CORRESPONDENT: A huge bomb is exactly right, Rahel. It's a 500-kilogram bomb, of which 200 kilograms are sheer explosives.

Now, this kind of unexploded ordnance is found fairly regularly in northern France. This is simply a part of Europe where there was so much fighting during World War II. I think the most astonishing thing about what we've learned this morning, apart from the trouble for all the travelers, because it isn't just the trains to London that are at a standstill, its also the trains across northern France. Basically all trains leaving the Gare du Nord.

So, regional trains, national trains, international trains. But beyond the inconvenience to travelers, this was a bomb, Rahel, that they found in the middle of the tracks just a couple of miles from Paris. As they were doing some work in that heavily, heavily populated part of Saint-Denis to the north of the French capital.

So this bomb has been sitting in the middle of these railway tracks since world war two. And again, railway tracks that link Paris to London. So they'll have been sort of feeling that bomb will have been subject to the vibrations of these tracks for a very long time. It was found fairly far underground, but still really surprising that it should have been found in such a densely populated area and in the middle of tracks that are some of the busiest out of Paris, Rahel, for now, what were hearing from the French railway operators is that they're demining operations going underway, and they hope that travel will be able to get going by the end of the afternoon.

But for now, a lot of disappointed travelers here at the Gare du Nord behind me, Rahel.

SOLOMON: Yeah, probably a lot of shock when they realize why they're being delayed, that there's an unexploded bomb that is apparently impacting travel. Not exactly what you expect.

Melissa Bell, appreciate you. Thank you.

All right. And still ahead for us, Europe moving to fill the void as U.S. President Donald Trump warms up to Russia.

[05:15:00]

Still ahead, a European vision for peace and a massive military build up for fighting alone.

Plus, an abrupt change in U.S. policy. Why Hamas and the U.S. are holding direct negotiations for what's thought to be the first time ever.

And Pope Francis had a surprise message for supporters on Thursday. Plus, the Vatican's new update on the health of the pontiff when we come back.

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SOLOMON: Welcome back.

Ukraine's energy system is taking fire again as Europe begins a massive rearmament campaign. Officials say that Russian missiles and drones hit energy facilities across Ukraine overnight, including in Odessa.

[05:20:03]

Two attacks left at least two people dead. Nine others were hurt. It happened hours after E.U. leaders outlined their vision for peace in Ukraine at a summit in Brussels. We brought it to you yesterday morning around this time.

They called for strong security guarantees and a seat at the negotiating table for the E.U. in Kyiv. Hungary was the only country that was not on board. The summit also gave the green light to a massive surge in E.U. military spending. And that follows the U.S. diplomatic pivot toward Moscow.

When open questions about the future of transatlantic alliances, a top E.U. leader describing the decision as groundbreaking.

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URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: I think today history is being written. We are coming out of this European Council, very determined to ensure Europe's security and to act with the scale, the speed and the resolve that this situation demands. We are determined to invest more, to invest better and to invest faster together.

(END VIDEO CLIP)

SOLOMON: Meantime, the U.S. is confirming plans to resume talks with Ukraine and Saudi Arabia next week. Officials say that the resumption of U.S. military and intelligence sharing is an option, but that there are no guarantees.

As Nic Robertson reports from the summit in Brussels, Europe, like Ukraine, is also feeling brushed aside by the U.S.

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NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice-over): Barely inside the doors at the E.U. in Brussels, Ukraine's Vladimir Zelenskyy huddles with top officials. Diplomacy across Europe accelerating as the U.S. tightens ties with Moscow.

This is what Europe working at speed looks like. Unlike the high speed decision making inside the White House, leaders here have to meet again and again and again, meaning there are no quick fixes to fill all the security gaps. They fear the U.S. is leaving them.

This meeting about raising money to pay for a massive defense spending hike with as much as 800 billion euros at stake.

VON DER LEYEN: Europe faces a clear and present danger, and therefore Europe has to be able to protect itself, to defend itself.

ROBERTSON: It's not just Ukraine feeling let down by U.S. President Donald Trump, it's Europe too. After years of fearing how a second Trump presidency would impact allies, reality has hit and it's ugly.

VON DER LEYEN: It is about time. This is something that we have been asking for a long time that the European union, that Europe is capable of standing up on its own two feet.

ROBERTSON: Zelenskyy, reeling from the apparently capricious cutting of U.S. intelligence and wider U.S. military abandonment at the table, his nation's future hanging on how fast European funds are authorized and how quickly the money is turned into weapons.

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: We are very thankful that we are not alone, and these are not just words. We feel it.

ROBERTSON: Not alone, but Europe. Not even close yet to having the money or deciding how to spend it. Europe's leaders still hoping for Trump's security partnership in Ukraine.

OLAF SCHOLZ, OUTGOING GERMAN CHANCELLOR: We must make sure, with a calm and wise approach, that U.S. support is guaranteed for the coming months and years, because Ukraine is also dependent on their support for its defense.

ROBERTSON: Inside the EU leaders meet, two pro-Russian leaders, Hungary's Viktor Orban and Slovakia's Robert Fico didn't' derail Europe's rearmament. Plans to raise the defense funds got the go ahead.

Nic Robertson, CNN, Brussels.

(END VIDEOTAPE)

SOLOMON: President Trump also says that his administration is considering revoking deportation protections for Ukrainians in the U.S. who escaped the war with Russia. In the Oval Office Thursday, President Trump said that some people think its appropriate, some people don't, and he'll be making a decision pretty soon. He added that Ukrainians have been through a lot and that he's not looking to hurt anyone.

Temporary protected status applies to people who would face extreme hardship if they were returned, forced to return to their homeland.

President Donald Trump also confirming on Thursday that his administration is holding direct talks with Hamas about releasing the remaining hostages in Gaza. President Trump said that the U.S. will not be giving cash to Hamas, but did stress the need for negotiations. This marks a sharp break in the decades-long U.S. policy of refusing to talk with groups that it considers terrorist organizations.

(BEGIN VIDEO CLIP)

REPORTER: My understanding is that the long-standing U.S. policy is that we do not negotiate with terrorists. So how did you come to the decision to send somebody from your team to negotiate with Hamas?

TRUMP: You have to negotiate. There's a difference between negotiating and -- and paying.

[05:25:04]

We want to get these people out.

(END VIDEO CLIP) SOLOMON: Now, when asked what actions the U.S. would take if the remaining hostages are not released, President Trump said, you're going to find out. Adding that things will, quote, get a lot rougher for Hamas.

After two months behind bars, suspended South Korean President Yoon Suk Yeol could soon return home. A South Korean court has canceled his arrest warrant. Yoon was detained in January on charges of leading an insurrection. And lawmakers voted to impeach him for declaring martial law back in December.

Now his criminal charges are separate from the impeachment trial. South Korea's top court will decide in the coming weeks whether to uphold the impeachment or reinstate him as president.

The Vatican says that Pope Francis spent a peaceful Thursday night in the hospital. That update, coming after supporters heard the voice of the 88-year-old pontiff for the first time in three weeks. He released an audio message thanking supporters for their prayers in St. Peter's Square.

And still ahead for us all, eyes on the U.S. economy as President Trump continues to make drastic policy changes. Just ahead, what we could learn from this morning's jobs report.

And President Trump is establishing a strategic bitcoin reserve as the White House prepares to host a crypto summit today.

We'll be right back.

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