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CNN International: Plunging U.S. Stocks; Wall Street Posting Worst Session Since 2020; Global Reaction on Trump's Tariffs; China to Counter Trump's "Bullying" Tariffs; Investors Shaken by Trump's Tariffs; Mexico Navigates Trump Tariffs; Fight Over Greenland's Future; Torpedo Bats Changing the Game. Aired 6-7p ET

Aired April 03, 2025 - 18:00   ET

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

[18:00:00]

JIM SCIUTTO, CNN ANCHOR: Hello and welcome to our viewers joining us from all around the world. I'm Jim Sciutto in New York.

Just ahead this hour, tariff turmoil to say the least. Markets plunging with Wall Street posting its worst session since 2020. That was the start of the pandemic. Canada retaliates with tariffs on certain U.S. car imports. European leaders say Trump's measures are, quote, "fundamentally wrong." China calls it bullying. And the bats baseball by storm. We speak to the CEO of the company that makes those so-called Torpedo bats.

Now, to torpedoing the global economy. We begin with global outrage over President Trump's sweeping new tariffs that have quickly and by choice thrown world economies and markets into turmoil. U.S. stocks ended Thursday's session with heavy losses as investors process the scale, the implications of these new measures.

The Dow dropping 1,600 points. NASDAQ plunging 6 percent. All this after steep losses for European and Asian stocks as well. U.S. Commerce Secretary Howard Lutnick says the president will not back down, will not be influenced by the markets. The president did say late in the day That negotiations with nations to bring those tariffs down however are possible.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Are you open to deals with these countries if they're calling you?

DONALD TRUMP, U.S. PRESIDENT: Well, it depends. If somebody said that we're going to give you something that's so phenomenal, as long as they're giving us something that's good, for instance, with TikTok as an example. We have a situation with TikTok where China will probably say, we'll approve a deal, but will you do something on the tariff? The tariffs give us great power to negotiate.

(END VIDEO CLIP)

SCIUTTO: For now, the rest of the world is reacting with shock and dismay, not only at the size and scale of the tariffs, but also the way they were somehow calculated by the White House. Canada, the first major U.S. trading partner to fire back announced 25 percent tariffs on some vehicles imported from the U.S. to Canada, matching the U.S. tariffs that took effect on Canadian vehicles Thursday. Prime Minister Mark Carney blasted the Trump tariffs saying they will, quote, "rupture" the global economy.

(BEGIN VIDEO CLIP)

MARK CARNEY, CANADIAN PRIME MINISTER: They're all unjustified, unwarranted, and in our judgment, misguided. And we are already seeing the consequences.

(END VIDEO CLIP)

SCIUTTO: Even some of Trump's fellow Republicans in Congress not on board with the new measures, fearing their effects on their constituents.

(BEGIN VIDEO CLIP)

REP. RICH MCCORMICK (R-GA): When you have whether it be steel, aluminum or whatever it is, if it's a commodity that's across the boards, particularly if tariffs have typically resulted in higher inflation. And that's not going to be, in my opinion, good for the economy.

(END VIDEO CLIP)

SCIUTTO: The Nonpartisan Tax Foundation says that the average American household will pay $2,100 more per year for goods because of Trump's new tariffs. Senior Political Analyst Ron Brownstein joins me. And, Ron, so much to discuss. I want to begin with you on the politics. You call this a strange political gamble. Why?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Yes. Because a lot more Americans buy things than make things, Jim, you know? I mean, even if this is wildly successful, there are about 12.7 million people engaged in manufacturing, and if you count people who would be involved in construction, building new plants, maybe you get up to 21 million people.

You know, amid Donald Trump's tariffs in his first term, even before COVID, he had increased manufacturing jobs, about 300,000 or 400,000. So, what would success look like here? 20 percent more manufacturing jobs? 25 percent more manufacturing jobs? You're talking then about 2 or maybe 3 million more people.

Meanwhile, 17 million people bought new cars last year. 300 million people own iPhones. They're going to be paying more for about. 450,000, 475,000 people who work in manufacturing toys or clothes in the U.S. How many people buy sneakers every year? You know, there's even a category, the political operatives talk about of voters called Walmart Moms. And you know, those are basically blue-collar white women and they work, to my mind, the voters who tip this election to Trump more than any other single group by their overwhelming vote for him in Michigan, Pennsylvania, and Wisconsin. What is Christmas going to look like in those households if these tariffs remain in place?

He's hurting a lot more people, I think, than he has the potential to help, even if this goes as well as he expects. And there are many economies that think you don't get the increases in manufacturing employment because of all the higher costs of input.

SCIUTTO: Well, people in this country, people around the world. Let me ask you this, because Republican Senator Chuck Grassley he is spearheading legislation, bipartisan legislation that would reassert Congress' authority over tariffs. First question is, is this a spot where Republicans actually stand up to the president with their votes, and if they do, this is crucial as well, will the president even listen to them?

BROWNSTEIN: You know, until proven otherwise, we have not really seen them stand up to him on anything. And, you know, you have had voices like Grassley and Ted Cruz today saying, well, I hope this is just a negotiating tactic. I think they're going to go a long way before they find the courage to stand up to him.

Certainly, the magnitude of the losses on Wall Street is something that really no one in either party can ignore anymore when you have a majority of American households having at least some exposure to the stock market through their 401(k)s. But I think Republicans are going to go a long way on this. You know, I mean, it is -- this is just an -- it's hard to think of a president gambling his presidency, the domestic economy, the global economy on a theory to this extent and getting so little pushback so far from his own party.

But look, he was elected above all, Jim, as you know, to help people deal with their cost of living. The risk he faced in his first months where the voters thought he was not sufficiently focused on the problem. He's now moved into a new stage of political risk where they think he might actually be compounding the problem. There's a lot of skepticism about these tariffs among voters very consistently in polls.

SCIUTTO: And that's certainly what the markets believe, right? These are millions of investors with a lot of money at stake on the line who are betting this is bad for the U.S. economy, for the world economy. Ron Brownstein, thanks so much.

BROWNSTEIN: Thanks for having me.

SCIUTTO: Well, Trump administration officials were busy today defending the tariffs on CNN and other channels as well. Within the past hour, President Trump's senior counselor for trade and manufacturing, Peter Navarro, promised a factory renaissance, as he says, he hopes firms would rush to build manufacturing here in the U.S. He defended the methods the White House used to calculate the new tariffs as well.

(BEGIN VIDEO CLIP)

PETER NAVARRO, WHITE HOUSE SENIOR COUNSELOR FOR TRADE AND MANUFACTURING: We used the methods of the trade economists in order to estimate what you need to go to zero in the trade deficit based on commonly accepted elasticities estimated over the last 30 years.

It's a very sound methodology. I think what the study does, Bill, I mean, it tells us just how huge, huge, the non-tariff barriers are.

(END VIDEO CLIP)

SCIUTTO: Earlier, Commerce Secretary Howard Lutnick urged patients on tariffs, saying it is time for the U.S. to get even against what he described as abusive trading partners.

(BEGIN VIDEO CLIP)

HOWARD LUTNICK, U.S. COMMERCE SECRETARY: Let the dealmaker make his deals when and only if these countries can change everything about themselves, which I doubt they will, because that is --

PAMELA BROWN, CNN ANCHOR: So, he is willing to negotiate then? So, he is willing to negotiate with these countries right now, or if they decide to look --

LUTNICK: Negotiate is talking. No talking. Doing. These countries have abused us and exploited us, as he said yesterday. They need to change their ways.

BROWN: All right. Let me follow up with you.

LUTNICK: Let's see them change their ways. It's going to be a long time. Let's see what they do. Not talking.

BROWN: OK.

LUTNICK: Talking is nonsense.

BROWN: Let me --

(END VIDEO CLIP)

SCIUTTO: Change everything about themselves. That's what you heard from Trump's adviser there. Despite the administration's optimism. Global investors clearly fear what comes next. U.S. stocks took their biggest fall since the height of the pandemic back in 2020. It wasn't just stocks. U.S. crude prices plunged 7 percent. That's a big measure of the status of the economy. Cryptocurrency, as they sold off as well. The dollar fell sharply against major currencies.

Richard Quest joins me now. You know, Richard we were talking about this earlier. This is a crisis of choice. And J.P. Morgan has just upped its chances of a global recession to 60 percent. Based on the many wise people you speak to in the business world, is that where we're headed, global recession?

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Yes. Well, we're going to -- you know what's going to happen is, Jim, we're going to see a massive slowdown as economies adjust to the rewiring of global trade.

[18:10:00] Whether we hit the, sort of the technical levels is moot, you're going to see a noticeable slowdown, and it's going to feel like a recession in many countries because they simply can't adapt quickly enough. This is a massive shock to the system. And yes, what's going -- you've got an immediate effect, which is the slow down, the extra money that people will be paying. The higher inflation. You've then got a medium- term, as people try to work around it, stop sending things to the U.S., start finding new trade partners that they can replace the work.

And then a long-term, which is decide where is the most reliable place for -- to do business. And people are telling me it's no longer the United States. First of all, the U.S. has offended allies in the way it's dealt with it's -- on its foreign policy, and now it offends them on trade. So, if you are looking for new reliable partners, why would you look to the United States?

SCIUTTO: Yes. Yes. I mean, that was the French president, Macron's, point today about investment in the U.S. He says it should be paused now because of all this. I wonder, speaking of business leaders that you're in touch with.

QUEST: Yes.

SCIUTTO: Do any of them believe Trump will back off that? He will say, actually, wow, this is more pain than even I expected. Let's make some deals. Let's quietly retreat. Tactical retreat?

QUEST: No, no, no. Hang on a second, Jim. He's not backing off or in Trump world is that victory of sorts. If he gets the tariffs down so that the U.S. has a more even level playing field, then arguably he has succeeded and therefore, his -- because if you listen to what he said on Air Force One just a moment ago, he said, if we'd asked them for all of this, they would've said no. So, we had to do it this way to get their attention. You know what the old phrase is, grab them by the -- and the rest follows. So, that's his view.

Now -- but it's somewhat contradictory to the long-term goal, which is to reenergize and restart American manufacturing. Because to do that, you will have to leave the tariffs in place so that it does become so painful. People adjust their business into the U.S.

SCIUTTO: Well, listen, it's asking a lot of partners around the world. I mean, as Lutnick was saying there is like they have to change everything about the way they run their economy. These are countries with their own people, public industries and leaders who might very well say no to that.

QUEST: No, the -- I think they'll say yes, and they'll say yes because they have an immediate problem to deal with, which is how to make sure their own economies don't fall over completely. So, yes, Trump's, right, you're going to see every country and their brother, sister, and uncle turning up asking for a deal, because in the immediate future you need to make sure your economy doesn't hit a brick wall.

But -- and this is which -- the point that's somehow getting lost. Longer term, you are going to say, we need to build trade relations with China. We need south, south trade Africa to Latin America. We need north, south trade. We need -- I mean, Mark Carney, for whom I have the most respect, having followed him and interviewed him over many years. Carney, basically says there is a fundamental change. We are not going back. And the way forward is to refashion your own trade relations. In the long run, the U.S. loses out. If that happens.

SCIUTTO: Richard Quest, we know you'll be watching. Thanks so much.

QUEST: Thank you.

SCIUTTO: Well, many Asian economies hit particularly hard by these new tariffs. They include Vietnam. Tariffs at 46 percent, U.S. treaty ally Japan, 24 percent. China, a new 34 percent tariff on top of existing duties. They now total 54 percent altogether. Those numbers can go even higher if Washington follows through on a plan to impose additional levies on any nation that buys oil from Venezuela, which China has done.

Beijing calls President Trump's move, quote, "bullying." Saying China firmly opposes this and will resolutely take countermeasures to safeguard its own rights and interests. Ivan Watson is live now in Hong Kong. You know what's interesting to me is here's China, America's adversary as identified by the president and others in this country on trade in national security, but it's using similar language to what you hear from America's closest allies, including its neighbor to the north, Canada, bullying.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Bullying and also accusing the U.S. of violating the World Trade Organization and also vowing that it will retaliate. We have yet to see how that response will come out.

You know, the announcement coming from the White House, it really did set off a wave of anxiety across Asia. You had stock markets from Japan, to South Korea, to Australia, to here in Hong Kong, they were all -- they all lost value, not nearly to the extent that we've seen in New York on Thursday.

[18:15:00]

And you had emergency meetings reported in Vietnam, in Korea, as governments were trying to figure out quite how to respond to this. The Chinese, we've heard, say there will be countermeasures, and they were the biggest targets. There were already at the start of this new Trump administration 20 percent tariffs imposed on China for not doing enough. The White House said to stop the flow of what it says are precursors for fentanyl into the U.S. and now, an additional 34 percent.

What came as a surprise is that every country got at least 10 percent, and that included the U.S.'s longtime ally, Australia. Take a listen to what the Australian prime minister had to say.

(BEGIN VIDEO CLIP) ANTHONY ALBANESE, AUSTRALIAN PRIME MINISTER: For Australia, these tariffs are not unexpected. But let me be clear, they are totally unwarranted. President Trump referred to reciprocal tariffs. A reciprocal tariff would be zero, not 10 percent. The administration's tariffs have no basis in logic, and they go against the basis of our two nations partnership. This is not the act of a friend.

(END VIDEO CLIP)

WATSON: Not the act of a friend, and yet, the Australian prime minister said Australia would not be retaliating. And we heard Japan as well, not issue threats. Singapore, a U.S. ally, pointed out that the enjoys a free trade agreement with the U.S., but also said it would not be retaliating. So, the elephant in the room is really China right now, what will it do?

But then there are other issues here. You know, as this trade war has gone on for years between Washington and Beijing, other countries have benefited, perhaps none more than Vietnam. A lot of manufacturing moving into Vietnam, it's just been hit with a 46 percent tariff from the U.S. It had more than $120 billion trade surplus with the U.S. last year. And I imagine that this is sending shockwaves through the Vietnamese economy right now, what will they do next?

SCIUTTO: Yes. How about U.S. allies, South Korea and Japan? I mean, these are countries that are treaty allies of the us. They have their own trade agreements. Are they particularly shocked by this kind of treatment?

WATSON: You know, South Korea's in an unusual position right now because it doesn't really have an acting president and it's in a bit of a political crisis after its president tried to declare martial law last year and he's on trial and we're anticipating the results of that in the coming hours.

So, it's, you know, a bit of a leaderless position. It has very close military ties, of course with the U.S. with tens of thousands of U.S. troops stationed there. It's -- some of its biggest companies, Samsung and Hyundai, saw their stocks plummet on Thursday as a result of this. And they're trying to figure out some kind of response to this. Japan as well, which saw Sony and Toyota and Honda hit hard on Thursday.

Interesting to see that in the week running up to this announcement from the White House that there was a revival of a meeting of cabinet ministers between China, Japan, and South Korea. The Chinese tried to make some hay out of this, but it did suggest that there's the beginnings of discussions between regional rivals about how to deal with the U.S., the world's biggest economy, suddenly declaring trade war on them.

SCIUTTO: Ivan Watson in Hong Kong, thanks so much. Coming up after the break, President Trump's tariffs shave trillions off of global markets. It's an enormous loss of wealth as investors deliver their own verdict. We're going to speak with the renowned wealth fund manager, Ross Gerber, next.

(COMMERCIAL BREAK)

[18:20:00]

SCIUTTO: In case you haven't noticed yet, it's been a huge global selloff in the wake of President Trump's tariffs. Trillions of dollars of value, trillions, wiped out as investors react to his attempt to reshape global trade. The Dow lost more than 1,600 points. That's the worst single day point drop since the pandemic. The broader S&P 500 finished 6 percent lower, closing at its lowest level since August. And the tech heavy NASDAQ plunged nearly 6 percent. Those were enormous drops in a single session.

Retail stocks were among the hardest hit. The CEO of Restoration Hardware was on a conference call with analysts Wednesday when the president made that tariff announcement. He use the words you can see on screen, adding -- I'm not going to repeat that word. This move is quite stunning. It's going to force everyone to just play a different game.

The company gets a large portion of its goods from Asia. Apparel makers will be hit particularly hard. Shares in Nike, Lululemon, under Armour all tanked enormously on Thursday, 9 percent, 18 percent, 15 percent.

Joining me now, Ross Gerber of Gerber Kawasaki Wealth and Investment Management. He's also one of Tesla's early investors. Ross, it's good to have you on.

ROSS GERBER, GERBER KAWASAKI WEALTH AND INVESTMENT MANAGEMENT: Yes, thanks for having me.

SCIUTTO: So, lots of questions for you. The first is this one, it's a practical one, does anyone you speak with or anyone like yourself who invests money, right, puts their money on the line for judgments like this, believe that Trump's plan, which apparently is to bring all manufacturing back to the U.S. will work?

GERBER: I don't think any rational person thinks that this will work in any way, because it's literally -- in America, like for example, we're just trying to get employees to come back to the office, let alone become garment workers in a new garment factory somewhere in America. Now, you can only imagine the cost of trying to run a garment factory in the United States versus Bangladesh.

So, there's just no way that anybody's actually going to bring any manufacturing to America because we don't need to manufacture things because we're a services industry and we are the I.P. of the world with intellectual property. We invent this stuff, or we make this stuff in other countries and we bring it in here. So, you're talking about fundamentally trying to do something that isn't going to happen.

SCIUTTO: You see J.P. Morgan today raising its chances of a global recession this year to 60 percent. First time I've seen a figure like that from one of the investment banks above 50 percent. Is that where we're headed, big picture? Do you see a global -- forget about a U.S. recession, do you see a global recession coming? GERBER: Well, this is obviously what the market's reacting to. And you know, I don't argue with the stock market. The stock market's saying this is going to cause a recession. And the way I see it is this is just a negotiating play. You literally cannot implement these tariffs without causing economic destruction across the world, which would be incredibly costly to America, to Americans, and especially the people who voted for Donald Trump are the ones that will suffer the worst from this decision.

[18:25:00]

So, the way I see it is this is just a negotiating ploy and he expects the whole world to come, you know, kiss the ring and negotiate with him and lower tariffs for America so that these tariffs never really come into place. But I think that's an extremely misguided policy.

And then, the other byproduct they haven't weighed is the fact that the consumers have just pulled back on spending like big time. You know, two months ago everybody was giddy, Trump's president, this will be great for business, spending money, planning trips.

SCIUTTO: Yes.

GERBER: Today everybody's pulling back. So, this will cause a recession, I think, almost a hundred percent chance by the end of the year if it's actually implemented. But I'm actually -- I don't think it will be.

SCIUTTO: Let me ask you this though, because if it is a negotiating tactic, let's stipulate that, companies, businesses, multinationals, they want and need certainty to make long-term plans. If I'm making a car that has parts coming from different countries, I can't -- let's say I make a deal today, I can't wake up in six months and Trump decides that deal wasn't good enough. I mean, that's effectively what he is doing now. I mean, he is violating the terms of the USMCA deal, which he negotiated himself in his first term. I mean, why would companies and countries have confidence in any deal they might make now?

GERBER: Right. And this -- you're absolutely hitting the bigger problem on the point, which you'll see, you know, right here with earnings coming out, you'll see companies with great earnings and all of them will say, we really just cannot tell you what earnings are going to be for the rest of the year.

And the same goes through with my company. You know, we had a lot of certainty of what we would earn this year, you know, based off where we're at. And now, with the markets in turmoil, you know, quite frankly, I can't tell you what's going to happen. And so, companies have to readjust their spending just like people are. And that's what I'm saying, it's already happening. The recession is already, in a way, beginning as consumers and companies are going to pull back and hold their capital until they have certainty.

And so, that's why this miscalculation by the Trump administration, I mean, he is literally like giggling while he's doing this, as the United States loses a trillion dollars plus, he's literally giggling. OK.

SCIUTTO: Yes.

GERBER: And all the gains we would've made from any trade benefit has just been wiped out in one day. He's literally wiping out the wealth of America for no reason. And we were in a very, very good economic position at the end of the Biden administration. So, this is completely self-created, which is even more, more upsetting. So, God forbid another thing happens that they can't control. I mean, this could become a real problem.

Now, I do want to caution people not to be too panicky and scared, and certainly, you should be talking to a financial adviser like myself or somebody like myself, because you need to have a very diversified financial plan moving forward, because I can't tell you this is going to be an easy time. But at the same respect, I don't believe that Trump or the people who back Trump are going to be comfortable with losing Americans trillions of dollars because their whole mandate for everything that they're saying, you know, will eventually be proven false, and they're not going to be back here.

So, you know, once again I am not a market timer, I don't know what's going to happen, but I think investors should be extremely conservative right now and look at their overall financial plan.

SCIUTTO: I was going to ask you about that, what you would recommend, and that's good advice. I'm sure it's not the last time we talk about this. Ross Gerber, thanks so much for joining.

GERBER: Yes. Thanks for having me.

SCIUTTO: Still ahead, Mexico. Well, it dodged the latest round of tariffs. But it was one of the first targets of Trump's tariffs earlier this year. We're going to discuss Mexico's path forward. Do they have a formula for dealing with Trump?

(COMMERCIAL BREAK)

[18:30:00]

SCIUTTO: Welcome back to CNN Newsroom. Quite a day. I'm Jim Sciutto. Here are more international headlines we're following. At least seven people have been killed after a series of tornadoes swept across the Southern and Central U.S. The State of Tennessee was among the hardest hit, five deaths there. Forecasters warned the same regions could be hit again this weekend with the possibility of life-threatening flooding.

Rescue teams in Myanmar have found two survivors more than five days after that massive 7.7 magnitude earthquake. A 53-year-old man pulled from under a collapsed hotel near the quake's epicenter. He was trapped for more than 125 hours. A 40-year-old man was pulled from rubble in another rescue nearby. More than 3,000 people have now been killed in that quake.

Hungary says it will withdraw from the International Criminal Court. The announcement comes as Prime Minister Viktor Orban hosts Israeli Prime Minister Benjamin Netanyahu in Budapest. You'll remember the Israeli leader is wanted by the ICC for alleged war crimes in Gaza. Hungary is obligated to arrest him as part of the ICC, but instead, well, it welcomed him.

Mexico is just one of the many countries weighing its response now to President Trump's tariffs. It escaped the retaliatory tariffs announced on Wednesday. It is still, however, facing tariffs related to fentanyl trafficking and border security.

Mexican President Claudia Sheinbaum announced new measures on Thursday to strengthen its manufacturing base. She repeatedly spoke of strong ties with the U.S. And promise to continue a dialogue based on cooperation and mutual respect.

Julian Ventura joins me now. He was Mexico's deputy secretary of foreign affairs and its former ambassador to China. Thanks so much for joining, Ambassador.

JULIAN VENTURA, FORMER MEXICAN DEPUTY SECRETARY OF FOREIGN AFFAIRS AND SENIOR ADVISER, ALBRIGHT STONEBRIDGE GROUP: It's great to be with you, Jim.

SCIUTTO: I wonder why you believe Mexico escaped additional tariffs in Trump's announcements yesterday?

VENTURA: Well, I mean, I think we did indeed dodge a bullet. I think Mexico breathed a guarded sigh of relief given the global turbulence and the magnitude of the reciprocal tariffs. I think at the very least, it's a basic acknowledgement that there is a trade framework, a functional trade framework in North America that President Trump himself negotiated during his first administration. I think that the intense engagement from the Mexican government has also helped in at least keeping open channels of communication that have resulted in preserving all of NAFTA, USMCA compliant trade.

There are still issues to be dealt with. You mentioned steel, aluminum, cars that have to be worked out. But at the very base level, it's a common-sense acknowledgement that we have a functioning trade framework in North America that is functional and that is huge.

[18:35:00]

SCIUTTO: Do you have confidence in that though? Because President Trump's position in that of his advisers is he wants to return all the manufacturing to the U.S., which would mean, of course, Mexico giving up manufacturing and manufacturing jobs?

VENTURA: I don't think that in the new context we're going to have complete certainty about anything. That's why permanent dialogue is important. I don't think that the U.S., with so many conditions being involved beyond the tariff push, behind investment decisions, labor costs, training, incentives, all the whole equation that goes into setting up a business in the United States, it doesn't necessarily make it, you know, a profitable proposition in all cases. I think that by keeping the USMCA framework alive, there's an acknowledgement that there could be a complimentary approach with Canada, Mexico, and the U.S. to, yes, bring back manufacturing to North America as a whole, a less U.S.-centric context. And we have to see if the U.S. administration is eventually receptive to that idea.

SCIUTTO: I spoke with the Canadian foreign minister who said the U.S. and Canada are now in a trade war. And you heard from the Canadian prime minister saying quite publicly that the relationship is fundamentally changed. That Canada, among other things, will be looking to other partners in Europe, in Asia, to replace the U.S., to the degree that it can. Will Mexico do the same thing? Do you believe it's necessary for Mexico to do the same thing?

VENTURA: Well, President Sheinbaum has very explicitly staked out since her campaign that relationship with the U.S. and North America, the economic relationship and preserving it and strengthening was her priority. She has also said this morning, she said before business leaders, that Mexico will push for greater diversification of its markets.

But Jim, that's a long-term process. You can't move from your immediate neighborhood in the short-term. You've talked to people in your program who talk about the center of gravity, geographical gravity in terms of trade. We see it in the U.K. after leaving the European Union, where a large concentration of trade still happens with Europe. So, you have to play both tracks in a smart way, combining short-term necessities.

The reality that many jobs depend on the North American supply chains and keeping a strategic eye on the ball to make sure that you open up your economy, that you keep opening markets and diversifying your position in a very, you know, polarized world. But the North American long-term bet, I think, is the most realistic and most viable regardless of the storms we're seeing coming out of the White House in the last in the last month or so.

SCIUTTO: Well, we will see how that bet plays off. Julian Ventura, Mexico's former deputy secretary of foreign affairs, thanks so much for joining.

VENTURA: Thank you, Jim.

SCIUTTO: Stellantis, of course, the parent company of Chrysler, says it is now pausing production at some of its Canadian and Mexican auto assembly plants because of Trump's new tariffs. As a result, 900 U.S. workers are getting temporarily laid off because of that production reduction. Making matters worse today, sees the start of President Trump's 25 percent tariff on all cars coming into the U.S. This means that foreign vehicles will become more expensive.

CNN's Omar Jimenez was at a car dealership near Detroit once the auto capital of the world. There, the consensus is clear, tariffs will trickle down to consumers one way or another.

(BEGIN VIDEOTAPE) GEORGE GLASSMAN, PRESIDENT, GLASSMAN AUTOMOTIVE GROUP: I've had my share of turmoil over the years. And so, that's why I'm comfortable that this too will be something that we'll be able to deal with and overcome.

OMAR JIMENEZ, CNN ANCHOR AND CORRESPONDENT (voice-over): But George Glassman knows it won't be easy. He runs Glassman Automotive Group in Southfield, Michigan, outside Detroit.

GLASSMAN: My father served the business in 1969. We haven't seen anything, in my opinion, this disruptive as long as I've been in the business.

JIMENEZ (voice-over): His current inventory of cars is pre-tariff, unaffected, but that won't last.

JIMENEZ: Do you anticipate having to raise prices on your vehicles when we get to that point?

GLASSMAN: Well, we're not going to have a choice. Ultimately, a decision has to be made by the manufacturers how much are they willing to absorb of the tariff.

JIMENEZ (voice-over): Which would affect prices for people like Laura Downing.

LAURA DOWNING, DETROIT AREA RESIDENT: I have huge concerns about the tariffs and all the different ways that purses are going to go up, not just as related to, you know, automobiles and auto parts, et cetera.

JIMENEZ (voice-over): As she spoke with us, she just leased a car. A newer one too.

DOWNING: With auto parts going up, I just figured it might as well be in something that's newer that I'm not going to need a lot of maintenance on.

[18:40:00]

JIMENEZ (voice-over): The Trump administration also plans to put tariffs on car parts by May.

DOWNING: I don't know how much I can say, but I mean --

JIMENEZ: You can say whatever you'd like.

DOWNING: you know, I think the entire thing is -- it's bad politics, even much further outside of just auto parts, you know, it's going to hurt a lot of people.

JIMENEZ (voice-over): And she wasn't the only one thinking tariffs.

JIMENEZ: So, that was on your mind when you came in to shop today?

ROBERT HOLIDAY, RESIDENT OF SOUTHFIELD MICHIGAN: Well, that was --

DENISE HOLIDAY, RESIDENT OF SOUTHFIELD MICHIGAN: That was the mainly reason.

R. HOLIDAY: -- on our mind, really the tariffs. Everybody's saying that the prices on automobiles are going to go up. We're kind on fixed income.

D. HOLIDAY: Yes. We're retired.

R. HOLIDAY: We're retired.

D. HOLIDAY: We thought we better come now.

R. HOLIDAY: Yes.

D. HOLIDAY: While we still can. And we still have our Social Security.

JIMENEZ (voice-over): Both the Holidays and Downing are part of what Glassman described as somewhat of a dash of customers in recent weeks. Trying to find something to drive before prices drive up.

GLASSMAN: You've got high interest rates, you've got food costs that are high, and now, their second largest purchase next to a home is also in play.

R. HOLIDAY: At least two of our friends that we know of are out as we speak.

D. HOLIDAY: Another one, she called. She was on her way to the dealership when she called us.

JIMENEZ (voice-over): But after this window of opportunity for customers comes reality.

GLASSMAN: Regardless of the make, the model, every single manufacturer will be affected by the tariffs.

JIMENEZ (voice-over): Even with the roadblocks, Glassman sees a way through.

GLASSMAN: Detroit has been through so much over the years. There have been ups and downs and the automobile business and its dealers have been resilient. The thought of building plants and having more manufacturing jobs here in the States is admirable, but it doesn't happen overnight.

(END VIDEOTAPE)

SCIUTTO: Coming up, the fight over the future of Greenland. Denmark's prime minister visited the territory as Trump's threats continue.

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SCIUTTO: The prime minister of Denmark is visiting Greenland as the U.S. government continues and the U.S. president to argue it should control the country. Mette Frederiksen toured the island alongside the incoming Greenlandic prime minister. U.S. President Trump and Vice President Vance have both argued in recent weeks for why Greenland should be American.

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Joining me now is Rufuss Gifford. He's former U.S. ambassador to Denmark. Ambassador, thanks so much for joining.

RUFUSS GIFFORD, FORMER U.S. AMBASSADOR TO DENMARK: Thank you, Jim. Great to be with you.

SCIUTTO: Danish leaders make it quite clear, Greenland is a territory of Denmark. Greenland's people in public polling show no interest in joining the U.S. Greenland's elected leaders have made it quite clear they don't want to join the U.S. and yet, Donald Trump continues to say the U.S. will get Greenland one way or another. I wonder are the U.S. and Denmark and Greenland, are they on a collision course here?

GIFFORD: Well, gosh, I hope no, Jim. I actually think you sum it up really quite beautifully. I think this should be case closed, right? This is a sovereign territory. Both the Danes and the Greenlanders, both on the political side, but also on the side of public opinion, which really, of course, we're all in democracies, should matter more than anything.

So, it is -- I will say it has been a very depressing chapter of American foreign policy history what we've seen over the last couple of months, across the board, I would argue, but it's -- in particular vis-a-vis Denmark and Greenland.

Look, there are lots of good reasons why we need to be investing more in the Arctic. Why we need a closer relationship with Greenland, both on the military side and on the economic side. But there is zero reason, Jim, zero reason why we need to acquire or get, to use Donald Trump's terms, in order to achieve the goals that we do have.

SCIUTTO: Yes. Does this lead purely to a diplomatic and economic crisis between the nations. Of course, Trump seems to be threatening economic pain, right, to get what he wants here or could it lead to a military one, right? Because President Trump himself has not taken military means off the table here.

GIFFORD: You know, look, this is the way I think about it, and I think about, who are the adults at the table right now? The adults at the table are the Danes and the Greenlanders. They are saying that the United States is our absolute best ally in the world, has been for the last 80 years, and we think it still is. The problem is the rhetoric coming out of the mouths of the president and the vice president.

We can dial down this rhetoric. We can increase our military presence in Greenland. Remember, we used to have 17 military bases in Greenland at the end of World War II. We have scaled back dramatically since the end of World War II, and then again even further at the end of the Cold War. If we wanted to, again, treat allies the way allies deserve to be treated, which is across the table and work this out, no one would welcome that more than the Danes and the Greenlanders.

And likewise, Jim, if the vice president and his wife wanted to bring an economic trade delegation to nuke the Capitol, they would have been welcomed with the red carpet that they so wanted. Because this is -- would -- again, love nothing more than for American investment in Greenland, and the Danes and the Greenlanders would love that.

But this ridiculous authoritarian talk about takeover is just so unnecessary and so problematic for the alliance, and not just the Danes. Again, the Europeans hear this loud and clear as well.

SCIUTTO: So, that was my next question. Will Denmark get help from its European allies, standing up to the U.S. on this? And I should note, by the way, those Denmark's European allies are also America's European allies, but on this issue, they are very much at loggerheads.

GIFFORD: You know, I would like to believe, as a glass half full guy in this and someone who knows a little bit about U.S.-European relations, that that could be avoided at all costs. Do I think that the Europeans will side with the Danes and the Greenlanders on this? 100 percent. Do I believe that this will ever come to any sort of military engagement? I do not. That's ridiculous. And I do believe this -- as ridiculous as this rhetoric is.

Of course, we have to take it very, very seriously. But I do believe that the Europeans will speak with one voice on this, and not just the Europeans, frankly, most of the rest of the free world, minus the folks that this really help, like Russia and China.

SCIUTTO: Rufuss Gifford, former U.S. ambassador to Denmark, we appreciate you joining.

GIFFORD: Thank you, Jim. A pleasure to be with you.

SCIUTTO: Coming up, something fun to talk about today. The Torpedo bat craze. The CEO of the company making those magical baseball bats will join us next.

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SCIUTTO: Well, baseball is buzzing over Torpedo bats made here in the U.S. by Victus Sports. The bats are customized to each batter with more weight where the player tends to make contact with the ball, more weight, more wood, and that means more power.

Multiple players on the Yankees are using the bats. The team trounced the Milwaukee Blues during last week's series, tracking up 15 home runs over three games -- three home runs on the first three pitches. Joining me now is Jared Smith, COE and co-founder of Victus Sports. Thanks so much for joining, Jared.

JARED SMITH, CEO AND CO-FOUNDER, VICTUS SPORTS: Yes, thanks for having me, Jim.

SCIUTTO: So, first question, are these bats definitely legal?

SMITH: Yes, 100 percent. There's no question these bats are legal. SCIUTTO: If they're legal, then, OK, and I know the rules are quite simple in terms of length, thick, et cetera. Are they fair, do you think? Are they 100 percent fair?

SMITH: A hundred percent. And so, we've been working with players directly to really customize them for our bats. We have a baseball performance lab down in Baton Rouge, Louisiana, where the players will come in the off season and really work with us, whether it's a Torpedo bat or a puck knob that we've been working on, an axe handle, we have all different options, really fit players for exactly what they need.

SCIUTTO: Do they work for all players or just some players?

SMITH: Because I know, you know, they didn't just start this year, there were players using them last year and so on. Does everybody see a statistical jump in their hitting?

SMITH: That's a good question, Jim. The bat certainly isn't for everybody. There is a bat for you, but this one is going to work better for somebody that makes more contact a little closer to the label area. So, for us, it's taking -- like you said, taking that mass out of the end here, putting it more into the hitting area for a player who tends to make contact, like I said, down in this area here.

SCIUTTO: Gotcha. Now, I wonder, as folks have been talking about these and seeing the results and seeing those Yankee players just launch home run after home run, are you seeing a jump in demand? You're getting more phone calls?

SMITH: Yes, absolutely. I mean, this has been the most popular thing in our 14 years of being here at Victus. The most iPhones lit up in a weekend, honestly, and I'd say over half of our players, which is over half of the league, between Marucci and Victus have reached out to sample or to at least inquire about this thing.

SCIUTTO: So, I mean, as I understand the physics of this, right? So, you put more wood, you make it thicker, if -- you know around where that particular batter makes contact. As revolutionary as that is, part of me thinks, well, why didn't someone think of that before, right? I mean, baseball's been around for more than a hundred years, why didn't someone think, hey, put more wood where you hit the ball?

SMITH: Yes. No, it's a great question. I mean, it's such a traditional game and we continue to innovate and -- I mean, even last year, like you said, there were players that were using it and there was players that would've performed better and did perform better. But because it looks different, it's hard to really get some people to really buy in and adopt it. But after seeing what the Yankees did, I think it, we kind of overcame that hurdle.

SCIUTTO: Final question, because there's all this talk about trade these days. I mean, is the wood imported to this country? Are you going to have a problem with costs for these things because of all the tariffs?

[18:55:00] SMITH: No, we're incredibly fortunate. Our mills are in Pennsylvania and Upstate New York. So, everything with these wood bats are made in America. Our shops right out here. Still got guys out there. You probably hear a little noise in the background. They're making the bats right now. So, no tariff issues with any of these Torpedo bats.

SCIUTTO: Well, Jared Smith, co-founder and CEO of Torpedo bat maker Victus Sports. Please send some more of them to my New York Mets, if you don't mind, just to, you know, kind of help them along this season.

SMITH: You got it, Jim.

SCIUTTO: All right. Well, a new and very rare discovery during the excavation of a tomb in Pompeii, in Italy. Archeologists unearthed two nearly life-sized marble statues. As you can see there draped in togas. A woman wearing lavish jewelry, including a crescent shaped moon necklace, possibly to ward off evil forces. Experts believe it suggests she was a powerful priestess and more important than the man. The ancient city in Italy, of course, burned under volcanic ash and the famous eruption of Vesuvius nearly 2000 years ago. The statues will be featured in an exhibition near the site in two weeks. If you've ever been there, pretty remarkable thing to see.

And thanks so much for your company today. I'm Jim Sciutto in New York today. Please do stay with CNN.

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