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CNN International: Trump Not Considering Pausing Tariffs; Trump Threatens China With 50 Percent Additional Tariffs; Trump Hosts Netanyahu At WH; Nuclear Talks Between U.S. And Iran; Impact Of Tariffs On Mexico; Supreme Court On El Salvador Deportation Case. Aired 6-7p ET
Aired April 07, 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]
RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE AND CNN HOST: Hello and welcome to you wherever you are joining me this evening, where in the world you happen to be. I'm Richard Quest in New York.
Together we're going to be talking about Donald Trump who says he's not considering pausing tariffs as he threatens China with a further 50 percent on goods imported into the United States. The president says the U.S. is having direct talks with Iran over its nuclear program with a very big meeting scheduled for Saturday. In the basketball battle, the Houston Cougars are facing the Florida Gators in the final round of the men's college championships.
Good day to you wherever you're joining me. It's been a day filled with rumors, ructions, and rebounds on Wall Street, but in the end, there were none other dramatic losses that we've seen over previous sessions. The Dow Jones was off around 350 points, but it seesawed throughout the session a good thousand or so. There were wild volatility over President Trump's global tariff plan.
So, you look there, the NASDAQ eking out just a smallest gain having had sharp losses. Now, all of this is despite the narrowing odds of a recession, and despite that, the president doubled down. He threatened China with a new 50 percent tariff if it doesn't back down from its own tit for tat that's introduced last week. So, you can see where this is going, ever escalating.
In the Oval Office, Mr. Trump defended his trade war. He said he was open to making deals to wipe out the U.S. national debt.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: They're experiencing a lot of hurt, and the hurt is that they've taken advantage of us and we finally fought back. Tariffs will make this country very rich. We're rich anyway, but we're rich in a certain way. We have $36 trillion in debt. I want to get rid of it, and we can do it quickly with proper deals.
So, when countries don't allow us to sell our product, but we allow them to sell their product, when they charge us massive amounts of money for the privilege of going into their country, those days are over. OK.
(END VIDEO CLIP)
QUEST: Now, Mr. Trump maintained his hardline stance as regards to the European Union, which today offered Washington a carrot and a stick approach. The commission president offered a zero-for-zero inducement for industrial goods on the one hand, and there was a warning of retaliation on the other.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: We stand ready to negotiate with the United States. Indeed, we have offered zero-for- zero tariffs for industrial goods as we have successfully done with many other trading partners, because Europe is always ready for a good deal. So, we keep it on the table.
But we are also prepared to respond through countermeasures and defend our interests. And in addition, we will also protect ourselves against indirect effects through trade diversion.
(END VIDEO CLIP)
QUEST: Our Senior Political Reporter Stephen Collinson. Stephen, very difficult to see the way this moves forward because, you know, on the one hand, Europe is watching and waiting and they haven't even retaliated yet for the steel and aluminum tariffs. But Donald Trump, this escalation with China, and if I'm not mistaken, I think he said the extra 50 percent comes in tomorrow at midday.
STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: Right. And I've been puzzling ever since that press conference about how we are going to possibly get out of this. And it seems to me that, OK, there is some openness from the president to do deals, but when you actually look what he said. He said, for example, that I want to do deals that are good for the U.S. and not the other side.
He -- anybody that's going to come and try and do a deal with a president I think is going to be banging their head against a brick wall just because of the vehement of his beliefs that the U.S. has always been ripped off, that tariff is a way to do this.
As far as I can work out from what he's saying, it's that other countries must lower tariffs. The U.S. will not necessarily do that to their products and that they need to buy U.S. products, but the U.S. may not need to buy theirs because there's going to have to be no trade deficit. Look what he said to Prime Minister Benjamin Netanyahu, who came into the Oval Office. He's got that 17 percent tariff on Israeli goods.
[18:05:00]
He says, we're going to eliminate our trade deficit with the United States. A reporter then asked the President, well, does that mean you'll get rid of the tariff on Israel? And the president said, well, no, not necessarily because Israel already gets a great deal from us because it gets 4 billion a year in terms of military support.
QUEST: I do -- I wonder, you raise the perfect point. How much of this is sort of decades of political philosophy, economic philosophy obsession by Mr. Trump versus he just doesn't care as long as he ends up with a zero-trade imbalance, which is meaningless in the wider sense of the word?
COLLINSON: Right. But in his mind, it isn't meaningless because it's the way he looks at the world is, I'm winning and you are losing, or vice versa. There are people on Capitol Hill who are desperately hoping that this idea that Trump is transactional, all he wants to do is deals, and all this is part of some attempt to gain leverage. But it -- but what the president is saying and what the president is doing doesn't seem to be that.
Now, the question is, do -- does the situation get so bad? That if the -- if he pushes the U.S. into a recession, do the political stake get so high for Republicans that he has to back down? But you know, he's so far out there now, putting a hundred percent -- basically what we're talking about is a hundred percent terrorist now on Chinese goods. That means your iPhone, for example, might start costing double. I mean, the extent of the pain that this can cause is extraordinary.
QUEST: OK. Now, let's take this idea of the Republican response. At the moment, there are noises. Let's not overstate it. There are a few people are -- you know, who are basically brought -- who've brought in some resolutions, but they're not the bulk. How much -- what -- from your soundings, how many are wavering and weavering and would jump if necessary?
COLLINSON: I think there are Senators especially, but also more moderate House members, who know how bad this can get for them politically. And it -- we haven't got there yet. The tariffs haven't all come in. It will take some time for prices to go up. That said, you know, voters generally that vote Republican are older. They're retired. The voters that Republicans rely on. Even though not every American has money in the stock market, many do have these 401(k) pension plans, which they're watching diminishing by the day.
I think over time the political pressure will build up, but the president is so far dug in. He believes in this second term that he's all powerful. And I'm not sure that he is necessary going to listen. When a president, in U.S. history, modern U.S. history, decides that they get in this foxhole and they're trying to prove everybody else is wrong and that they're right, a lot of damage can happen before circumstances get them to change their position.
QUEST: That's the point. It's the damage. I'm grateful for you, as always. Thank you, sir.
COLLINSON: Thanks.
QUEST: To Asia, we were just talking there. President Trump has said that China has until Tuesday midday to remove its tit for tat retaliatory tariffs. Remember, the U.S. put on reciprocal tariffs, China -- the 34 percent. China did a retaliatory tariff and what I shall call escalatory tariffs, which would come in at 50 percent tariff barrier tomorrow. This is what the president said.
(BEGIN VIDEO CLIP)
TRUMP: With China, as you know, against my statement, they put a 34 percent tariff on above what their ridiculous tariffs were already. And I said, if that tariff isn't removed by tomorrow at 12:00, we're putting a 50 percent tariff on above the tariffs that we put on.
(END VIDEO CLIP)
QUEST: Now, the -- look at the markets and how they responded. By the way that Hong Kong Hang Seng was just absolutely dreadful. The closing number in Hong Kong down around 13 percent. Its worst day since 1997. The Composite in Shanghai was off 7 percent in the region.
Japan's prime minister has called President Trump, urging him to reconsider Japan's 24 percent tariff. Shigeru Ishiba has warned that Japan is the largest foreign investor in the U.S. and new tariffs would limit investment.
Ivan's with me from Hong Kong. They're probably still sweeping the sort of -- the wreckage after yesterday's sharp fall before you open this morning. Ivan, how likely is it that -- I think I almost know the answer to my own question.
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How likely is it that China is going to withdraw its 34 percent retaliatory, thus avoiding the escalatory?
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Right now, I don't see it. All the messages that we've been hearing from Beijing are, you need to treat us with respect. If you're going to threaten us and bully us, we will come back at you. And that's what Beijing did Friday night. That was a national holiday in China.
And after Trump had announced his initial kind of round of ramping up tariffs on China to a combined total, in this Trump administration, of 54 percent, China said it was retaliating and going to hit back with 34 percent, and that likely contributed to the stock market plunge that we saw in New York on Friday. So, now, Trump is escalating again. We'll likely see -- I find it hard to imagine that the Chinese would back down at this point. Take a listen to what the foreign ministry had to say on Monday.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
LIN JIAN, SPOKESPERSON, CHINESE MINISTRY OF FOREIGN AFFAIRS (through translator): We have emphasized multiple times that pressure and threats are not the correct way to deal with China. China will firmly safeguard its legitimate rights and interests.
(END VIDEO CLIP)
WATSON: And let me add, you know, there was a commentary published in People's Daily, that's the Communist Party mouthpiece in China. And it basically said, you know, we've had eight years to prepare for this. There are other countermeasures in our arsenal. So, this is a very different time.
The trade war has been ebbing and flowing between China and the U.S. since the first Trump administration, and I would hazard the guess that Beijing has been preparing for a moment like this for quite some time.
QUEST: Now, if we look around the region, you had Vietnam sort of saying, please don't do it to us. Cambodia saying, going down to zero. Japan, I mean, my word, not yours, groveling in a sense. Where does it go?
WATSON: That is this question that we're all wrestling with and that we've seen the impacts here in Hong Kong on the stock market. I mean, this historic generational plunge in the markets right now. China has the -- you know, the world's second largest economy has said it will fight back in this trade war. Most other countries are begging for help and trying to avoid an escalation.
And the messages that are coming across, you know, it was very interesting. The Singaporean prime minister -- and Singapore hosts a U.S. Naval base, was addressing his own citizens on Sunday with some very dire warnings about where the world is headed right now. And attributing this completely to the U.S. trade war and so-called Liberation Day. Take a listen.
(BEGIN VIDEO CLIP)
LAWRENCE WONG, SINGAPORE PRIME MINISTER: The era of rules-based globalization and free trade is over. The last time the world experienced something like this was in the 1930s. Trade wars escalated into armed conflict and eventually the Second World War.
(END VIDEO CLIP)
WATSON: So, Singapore, like Japan, like Australia and some of these other smaller economies has said it will not retaliate. But that same leader is warning his citizens, we are in a small country. We have benefited from the free trade system that the U.S. helped build after World War II, and now we're heading into dangerous, uncharted waters, trying to prepare his own citizenry for what may be next.
QUEST: Ivan, I'm grateful. Early morning, early start for you. You've got a busy day as Asia gets underway and you'll be reporting that with us. Thank you, sir. I'm grateful.
Now, the president, once again, U.S. president that is, accused European countries of not buying enough products from the United States, and that of course included automobiles.
(BEGIN VIDEO CLIP) TRUMP: The European union's been very bad to us. They don't take our cars, like Japan in that sense. They don't take our agricultural product. They don't take anything practically. And yet, they sent millions of cars in a year. Mercedes-Benz, Volkswagen, BMWs, they're sending millions and millions of cars into the U.S., but we don't have a car that's been sold to the European Union.
(END VIDEO CLIP)
QUEST: Now, the president says Europe will also have to buy not only automobile or it wants to sell automobiles in there, but Europe will have to buy energy. And this was the big one in a sense, they have to buy energy from the United States.
[18:15:00]
(BEGIN VIDEO CLIP)
TRUMP: We have a deficit with the European Union of $350 billion, and it's going to disappear fast. And one of the reasons and one of the ways that that can disappear easily and quickly is they're going to have to buy our energy from us, because they need it. They're going to have to buy it from us. They can buy it. We can knock off $350 billion in one week.
(END VIDEO CLIP)
QUEST: The E.U. faces 25 percent tariffs on its steel, aluminum, and auto exports, and 20 percent on almost everything else. European -- most of the European stock indices look at the numbers, they're all round about four to four three quarter percent.
Earlier I spoke to Carlos Cuerpo, the Spain's minister of economy, trade and business. He discussed Europe's plans and how Europe, the E.U. level, is going to deal with the tariffs.
(BEGIN VIDEO CLIP)
CARLOS CUERPO CABALLERO, SPANISH ECONOMY MINISTER: The message that we want to send from the U.S. side is being cool-headed and really getting into de-escalation with the U.S. and if possible, actually get into an agreement with the U.S. authorities. That's what we want. And of course, we want all lines to remain open because we think it's in the interest of everyone. We have a lot to protect here. When you think of how much is at stake, for example, on a daily basis, it's 4.4 billion euros that actually crossed the Atlantic in terms of exchange, in trade, in goods and services. So, there is a lot to lose if we don't come to an agreement. And that's where the E.U. is.
And today, we had an important meeting in Luxembourg of ministers of trade, and I think the message of unity and trust going ahead is an important one.
QUEST: Yes. But what is that message of unity? What, that you all agree that you're going to agree? I mean, I don't understand. The E.U. has a lot of meetings about these things, but I'm not sure what is the end purpose.
CABALLERO: Well, actually the message of unity is key for us, because we all understand that if we go alone on a separate basis to try and find a deal with whoever we are sitting on the negotiating table, we will be seen and we will be felt as a small country, but being together as one, there we will actually have the scale and we have the power to negotiate and come to fair agreements. That's why it is so important to actually give unity to the negotiating mandate that the commission has in -- on trade.
QUEST: So, Spain has a lot of exports to the United States, it's a major. Right the -- and it's everything from agriculture to machinery to high tech, to far -- I mean, it is one of the most advanced countries when it comes to -- where do you and where does the Spanish government stand on retaliation?
CABALLERO: Well, again, I think here we all stand pretty much at the same level at the E.U., which is keep the lines open, try to negotiate. But as you just heard President von der Leyen say, we need to be ready to counteract. Because we need two to tango. We need two to come to an agreement. And if there is no agreement on the line, then, of course, we will be ready to put countermeasures on the table.
Both on the first step, which was the measures against steel and aluminum, but also on the second step, which is the measures against the automotive sector and also these general types that were set up last week.
(END VIDEO CLIP)
QUEST: So, that's the view. But wherever we look, the reality is wealthy business leaders are now coming out against the president's tariffs, and that list includes some of his vocal supporters like Bill Ackman. The billionaire investor says the new tariffs, in his words, amounted to economic nuclear war.
J.P. Morgan's Chief Jamie Dimon says the tariffs will increase inflation and lower growth. Even Elon Musk appears to have broken with the White House saying this weekend he wants the U.S. and Europe to strike a free trade deal.
(BEGIN VIDEO CLIP)
ELON MUSK, TRUMP PRESIDENTIAL ADVISER: I hope it is agreed that both Europe and the United States should move, ideally, in my view, to a zero-tariff situation, effectively creating a free trade zone between Europe and North America. And also, more freedom of people to move between Europe and North America. So, that has certainly been my advice to the president.
(END VIDEO CLIP)
QUEST: Now, Tom Porcelli is the chief U.S. economist at PGIM Fixed Income. Hello, sir. Good to see you.
TOM PORCELLI, CHIEF U.S. ECONOMIST AT PGIM FIXED INCOME: Hi. How are you?
QUEST: Well, what are -- what's your view on a recession? Where are you on the scale?
PORCELLI: Yes. You know, I'll tell you exactly where I am on the scale. If there's no exit ramp from this, if these extreme tariffs remain in in place, you'll have a recession. You know, we don't need to hide behind any percentages. I think that's the harsh reality that's facing us.
So, I think, you know, my bigger problem though is even if there is an off ramp, I don't think tariffs are going away. And so, this cloud --
[18:20:00]
QUEST: Right. But what does that off ramp look like? Because I can't see the basic 10 percent tariff, the new base rate going away. But let's say, for example, you start getting large bilateral deals down to zero, Japan, I don't think China, but maybe the E.U. Although, that might mitigate a recession, and we won't hang ourselves on that question, it does beg the question, as those bilaterals get done, does that actually improve the U.S.'s trading position?
PORCELLI: Yes. And here's -- and this is what's critical. If they get done and the whole tariff thing goes away, then I think you clear the debt to some extent. But if the -- if -- but if the threat of tariffs will remain in place even after bilateral deals get struck, then you'll still have this uncertainty that lingers over the market. And so, what -- ultimately, what's going to wind up happening is growth is being compressed, particularly if you're going to allow the threat of terrorist to linger.
QUEST: And related to this, the dollar. Dollar is weakening, which of course is extremely unusual at times of tension, one would expect. There's an intricate and extremely complex play going on under the water between oil, gold, and the dollar that I can't really work out what is happening.
PORCELLI: Yes. So, you know, it's funny. I'm going to use the moving yields that we saw today as sort of, I think, a very sort of indicative way of thinking about what's happening from a market perspective. Because while I think the equity market reaction, you know, sort of fundamentally speaking makes a lot of sense, when I look at something like, say the yield reaction, that did not make a lot of sense today.
And so, how do you sort of square that circle? And I think, again, this construct I think applies to many markets. I think you have to consider high volatility, lots of uncertainty, big flows that are going through and repositioning on the back of all of that, it means you can get very outsized and counterintuitive moves.
So, if you're asking me what is the direction of travel, right? You know, a single day's move, notwithstanding, ultimately, I think it's for lower yields as the inflation impulse ultimately will give way to slowing economic activity and a Fed that will ultimately have to step in and cut.
QUEST: This is a gut feeling question. You know, this is one of these feelings that the questions that one can never really point to. I mean, I'm sure a chart that give us 1,001 reasons. Do you get the feeling that the market has capitulated yet?
PORCELLI: No. So, meaning, do I think that the market can actually continue to move in the direction that we saw today?
QUEST: Exactly.
PORCELLI: If that's what you're asking, the answer is yes. I mean, there's no clarity whatsoever and what's going to happen here. And I think what's going to wind up happening is the market is going to continue to bake in these worst-case outcomes. And that to me would suggest that you continue to move lower, at least from a risk perspective, right, from an equity market perspective. And I think you'll start to bake in even more Fed cuts.
QUEST: I'm grateful to you, sir. We'll talk more as things move forward. Good to see you. Thank you. Have a good evening now.
PORCELLI: Good to see you.
QUEST: Ahead, the direct nuclear talks between Washington and Tehran.
(BEGIN VIDEO CLIP)
TRUMP: We have a very big meeting and we'll see what can happen. And I think everybody agrees that doing a deal would be preferable to doing the obvious.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[18:25:00]
QUEST: President Trump says the United States is in direct talks with Iran over the country's nuclear program, and warning that Tehran would, in his words, be in great danger if those talks fail.
(BEGIN VIDEO CLIP)
TRUMP: We're dealing with the Iranians. We have a very big meeting on Saturday. And we're dealing with them directly. You know, a lot of people say, oh, maybe you're going through surrogates or you're not dealing directly, you're dealing through other countries. No, we're dealing with them directly. And maybe a deal's going to be made. That'll be great. Got to be -- it'll be really great for Iran. I can tell you that.
(END VIDEO CLIP)
QUEST: Now, Firas Maksad is the managing director for the Middle East and North Africa at the Eurasia Group. Wow. Good to see you, sir. Were you as surprised as the rest of us when he sort of casually just, oh, yes, you know, I'll have a cup of tea, oh, by the way, we're having a meeting on Saturday? It's a big meeting. It was all a bit weird.
FIRAS MAKSAD, MANAGING DIRECTOR, MIDDLE EAST AND NORTH AFRICA, EURASIA GROUP: Richard, it's good to be with you again. A lot of disorder and confusion on the back end of that comment. Obviously, Trump team would like to say that this is part of the disruption that he likes to bring along. He's the great disruptor.
Nobody really knows what President Trump was referencing. The Iranians, of course, have said all along that they would accept indirect negotiations, not direct negotiations. And they've placed the conditionality. They said, if these talks in fact go, well, then maybe we go up to having a direct negotiation. So, it just might be that President Trump wanted to put the Iranians in a difficult position by calling them out on public -- in public by saying those will be direct, or maybe perhaps there will be direct negotiations, just that the Iranians didn't expect that they would be publicly announced. Nobody really knows. Everybody's working their sources. And I could tell you even in Tehran, officials are asking themselves, did somebody make a promise to President Trump that we're not aware of?
QUEST: And this very worrying comment about big danger. I mean, we would like talk rather than the other obvious solution. He was asked specifically would he use military might against Iran's nuclear power? And essentially, he said, it's not off the table.
MAKSAD: Well, it's not off the table, but I don't think that this was a good meeting for Israeli Prime Minister Benjamin Netanyahu. Listen, he was called to come to Washington to have an audience with a president. First, he was expecting to have some kind of concession on the tariffs. The president, President Trump did not give him that.
Second, when Trump, as you pointed out, was asked directly about the military option being on the table, should diplomacy with Iran fail, trump didn't want to say that. He didn't say that he would use force. He said it would be something very difficult that the Iranians would not enjoy and wouldn't want.
So, for various reasons and talking about Gaza also, Trump wants Gaza to end soon, wants there to be a ceasefire. I don't think Benjamin Netanyahu walked out of that meeting today being a happy camper.
QUEST: And then we had this interesting development with Erdogan, didn't we, who's clearly best buddies with Trump, not so with Netanyahu. But Donald Trump made it very clear that Erdogan -- that the Turkish president is very much part of the process.
MAKSAD: Exactly. And thank you for bringing that up. Yet another example of why I think Bibi didn't get all that he was looking for out that meeting with Trump today. Obviously, Turkey and Israel having competition over influence in Syria after the collapse of the Assad regime. Israel conducting almost regular bombing raids and now have pushed further into Syria. And the Turks have great influence with the group that has taken power there. So, that is heating up.
[18:30:00]
And we heard President Trump say in a response to that today that he is so close and has -- is very fond of the Turkish president. And I'm sure that didn't land well with the Israeli prime minister.
QUEST: We'll talk more, sir. I'm grateful. Thank you. Have a good evening.
MAKSAD: My pleasure.
QUEST: We continue in the Newsroom, the new tariffs. Now, what does it mean actually for what we buy and spend? I'll speak to one of the many companies affected by the tariffs and why meals may be a little more expensive.
And we'll also be introducing you to our basket. The various items that you're going to be buying in the days and weeks ahead, and how much it's all likely to cost. I'll show you what's in the basket in a moment, and these strawberries are rather good.
(COMMERCIAL BREAK)
QUEST: Welcome back to CNN Newsroom. I'm Richard Quest. These are the headlines that we are watching on your behalf. President Trump is standing by his plan for a U.S. takeover of Gaza. And he's got support for the plan from Israel's prime minister, Benjamin Netanyahu, when they met at the White House. The plan is widely opposed by Arab states. Mr. Trump insists that plenty of countries would take in displaced Palestinians, and he called Gaza an incredible piece of important real estate.
More than 20 people have died after violent storms and floods have sweat across the Midwest and Southern United States. While much of the rainfall has subsided, officials say the danger from flooding remains. Kentucky is under a state of emergency due to the overwhelming historic levels of water.
The U.S. health secretary has attended the funeral of an eight-year- old measles victim on Sunday in Texas. She's the second unvaccinated child to die in the state's measles outbreak. In a significant shift, Secretary Robert F. Kennedy Jr. now says vaccination is, in his words, the most effective way to fight measles. Texas and the surrounding states have reported more than 500 cases of the virus.
[18:35:00]
Now, as we cover the effects of tariffs at a macro level, it's important to remember there will also affect all of us in our everyday lives. And so, we have put together the most commonly bought items that you're likely to find. Of course, there are fruit. So, whether it's bananas from wherever or strawberries. You've then got coffee, which is an absolute must. As you can see, I'm already drinking some. You've got coffee. Now, I emphasize this is not a scientific list, but this is what we know from what people have told us. Rice from India, for example. We have some cheese from the European Union. Vanilla from Madagascar. Clothing, shirts, like -- and socks and other household items like oils and toilet paper.
Now, there's the full list that we've got. We've added also a TV and we've added a phone as well. Over the next few months, we're going to be monitoring the cost of all of this to see exactly how it's likely to -- I don't know why I'm holding the toilet paper. Please do excuse me. I should be holding something perhaps a little more appropriate than a round of toilet paper. You get the point.
My next guests are going to say, oi, Quest, why are there no spices involved in your basket? And that's because I was going to ask them what spices that we should be using, because there are spices, like coffee, for example, that can only be grown in specific areas of the world.
So, joining me now are Ethan Frisch and Ori Zohar, the co-founders of Burlap & Barrel, they're both with me. Good to see you gentlemen. We'll get to which spice we should use in a moment. But firstly, what do you think is going to be the effect? What are you expecting the effect of all of this to be on your business?
ETHAN FRISCH, CO-FOUNDER AND CO-CEO, BURLAP & BARREL: Yes, Richard, thanks for having us and thanks for giving us this chance to talk about it. You know, we're a spice company. We import from 30 different countries around the world. Everything that we bring in pretty much can't be grown elsewhere. Cinnamon from Vietnam and black pepper from Zanzibar. And so, it's -- you know, it's not like we can just switch our supply chains. We're going to see our costs go up pretty significantly depending on how all the tariffs shake out.
QUEST: So, within that area, Ori, the idea -- I mean, what percentage, that just sounds so silly in a sense, but I think you know what I mean, is the import cost of the raw materials?
ORI ZOHAR, CO-FOUNDER AND CO-CEO, BURLAP & BARREL: Yes. Well, what we really know about the spice world is whatever the ripple is at sourcing for the company, it becomes a wave by the time it hits the customers. So, only a few cents of increase for big companies can turn into dollars at the register for regular customers. And so, you know, spices don't grow domestically here. There's no domestic cinnamon, there's no domestic peppercorns. We don't think about this as we sprinkle some of the most iconic American ingredients, you know, into our dishes from apple pie to ice cream.
But really cinnamon is tree bark that comes in from Vietnam, and that's where it grows the best. And in Vietnam, we're talking about 46 percent tariffs. Who knows where it's going to end, but this is going to lead to big increases in cost of the register for everyday Americans.
QUEST: How much can you -- either of you gentlemen, how much can you eat of that cost yourself into the margin? Because the way it's going to go, of course, is the wholesaler or the importer will pay it and then it get distributed out at cents per whatever to everybody else in the chain. But to large manufacturers like yourself, you do have the percentage, the ability to eat quite a bit of that cost. FRISCH: We're planning to eat the whole thing. I mean, that's our approach here. We're a small company but we're committed to our customers, to accessibility. Our prices are kept at under $10 on our website, and we think we can absorb the cost. I think it's going to -- people are really going to see it in the supermarket on a lot of other products, but we're committed to keeping our prices steady and not raising our prices in response to these tariffs.
QUEST: Ori, are you worried? I mean, again, you know, is this existential for you?
ZOHAR: So, like Ethan said, I mean we are a small business. We turn 10 next year. We're a social enterprise. We're not as rigid as the big companies who have to pass costs along. So, we're scrappy. We have direct relationships with all of our partner farmers, and we're going to find lots of clever ways not to ask them to cover the tariffs and not to raise costs.
But what we're doing is we're slowing down some of our innovation. We're not doing as many fun new products in all of this. And all these companies, like we're trying to plan for holidays right now. We should be talking about November and December and what we're going to do, because this is when we talk to farmers who are working with an agricultural product where there's a once-a-year harvest and we don't even know what's going to happen next week right now.
[18:40:00]
So, we're just getting ready. We're hosting a big sale on our site right now just to sell as much inventory as we can so we have more cash in our business, that will give us like more resources to be able to kind of weather whatever storm is coming our way.
But this is a problem for all American businesses and in particular, small businesses that don't know where things are going. We need some stability and some clarity to be able to plan and build our business and pay our employees and do all the things that we do here in the us.
QUEST: Now, that's crucial because more and more people are saying, oh, look, if the tariff is reduced on Vietnam, we'll all be fine. If it's Cambodia or if it's Tanzania, if that tariff is reduced, you'll have the certainty. But I'm hearing you say that's not the case. It's not just a matter of reversing, you need more long -- you're shaking. Go on, you're shaking your head. Ori, go -- well, one's shaking, one's nodding. So, I'll take the shaker.
ZOHAR: Yes. Yes. We're -- we work with farmers a year out. We're working right now with farmers on their 2026 harvest. The summer harvest has already been planted a long time ago. That's coming in now. And so, we're talking a year out. And even if you think about it further, our cinnamon comes from Central Vietnam. It's the best cinnamon in the world. These are trees that have grown for 10 to 15 years. This is not something that we can simply pivot to another country, to another terroir. There is no domestic equivalent of these spices in the U.S. So, what ends up happening is it ends up being purely attacks on these products that most companies are going to pass along. And we are going to do everything in our power to get creative and absorb it so that customers still have affordable spices here in the U.S.
QUEST: Go on. What was that you were just brandishing, Ethan? What was that?
FRISCH: Oh, this is the cinnamon that Ori is talking about. This is the bark of the cinnamon tree from Vietnam. This is a relationship that we've worked on for years. We're the only company to import this variety of cinnamon. And you know, you asked if it was existential, it may not be existential for our business overall, but it could be to these specific supply chains --
QUEST: All right. Gentlemen --
FRISCH: -- where may be the only customer. Yes.
QUEST: I'm prepared to add one spice to the basket. Just -- no, no, no. Don't look at me like that. I recognize that look. One spice, which is the most common spice that we should add to the basket?
FRISCH: A really good black pepper, I think has an amazing impact on food. Underrated, I would say.
QUEST: Which one?
FRISCH: Black pepper. Black pepper.
ZOHAR: Yes, I'll show you here. These are Zanzibar black peppercorns here. These are incredible. It's the fruit of a climbing vine that's picked by hand. And here's the cinnamon. The apple pie is not apple pie without cinnamon in it. So, a lot of these things that we take for granted as Americans may become a lot more expensive, a lot more rare and a lot harder to find.
QUEST: We need to move. All right. Black pepper. I like a bit a black pepper. Thank you, gentlemen. We'll follow this. We'll follow you, I promise you, and we'll talk more about it. Very important.
ZOHAR: Thank you for having us.
QUEST: As we continue, the U.S. Supreme Court is weighing in on the case of a man wrongfully deported to the prison in El Salvador in a moment.
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[18:45:00]
QUEST: It's a temporary win for the White House in the case of the man sent to that prison in El Salvador by mistake, you know the case. Now, the U.S. Supreme Court's paused the court order that would've forced the U.S. to bring Kilmar Abrego Garcia home by midnight tonight. You'll remember they deported him last month by accident. The U.S. admits he was sent to El Salvador by an administrative mistake. Both sides say they need more time to make their case in court. The White House is also arguing it can't force El Salvador to send him back. And that lower court has overstepped its authority.
Joey is with me, Joey Jackson. This was the chief justice on a motion. It was a sort of a to be expected result. It doesn't necessarily tell us which way obviously the court is thinking.
JOEY JACKSON, CNN LEGAL ANALYST: Yes, that's absolutely right, Richard. And I would not classify this as a win by any stretch of the imagination. Courts need time. And in order for courts to have time, what they do is that they pause a case so as to give the parties the ability to argue the case on the merits.
So, far, the White House has lost. They've lost with respect to the district court judge, that's the first level in federal court, making a determination that his, right, removal was unlawful. Then you have the next higher court, Richard, that's called the Circuit Court, and they said, we're not touching that order. We think the judge got it right.
And so, now the Trump administration went to the Supreme Court, the highest court to get relief, and the Supreme Court did not say the White House was right, did not say the White House was wrong. What they said is, we're going to adjourn it administratively in order to give the parties an opportunity to further brief it so we can consider it. That's where we are.
QUEST: The courts always look for, if you will, on really difficult stuff. If they don't want to touch it with a 10-foot pole, they often manage to find to wiggle around it. And I'm wondering, in this case, whether it's likely that they'll wiggle around it on the grounds that there's no point in them making an order that can't realistically bill fulfilled. It's a moot point if they can't get him back. It just belittles the judgment and the jurisdiction.
JACKSON: Yes. Well, I certainly hope not. I mean, we're experiencing really different times here in the United States. It's really head spinning as a person who practices law. Think about what happened here, you took a person who was here lawfully based upon a 2019 court order, and in that order it said that he was not to be removed. Not to be removed. An immigration court judge did that after hearing evidence. Evidence is when you put on your case, the other side puts on its case. You evaluate what actually happened, and a judge makes a determination.
Between 2019 and 2025, what occurred was he checked in annually, there were no crimes at all committed, but the Trump administration says, hey, you're a criminal. Come with me. You're going on a flight. You're out of here. No hearing, no determination of evidence, no aspects of the facts, just an accusation. You're a gang member, you're leaving. And then to say, well, he's no longer in our jurisdiction, says the Trump administration. There's nothing we could do about it, right? Too bad. So, sad. See you later. That's a problem.
QUEST: Is it likely that the Supreme Court, when the court is heard, is likely to say to them, listen, has anybody actually asked El Salvador to send him back? I mean, so far, the administration is saying it doesn't have the power to do it. But we don't know that anybody's actually said -- well, we sent him -- but would you mind sending him back, please?
JACKSON: Yes. So, that's a good point. But the reality is that he shouldn't be there in the first place. The reality is that he was unlawfully arrested, detained, and deported, right? And if you do that, you have an obligation if you're the government to correct your error. The further reality is he was sent without evidence.
Now, he could be a gang member, maybe, maybe not. But my issue is that's why you have due process. You go to a court, you have a hearing, you make a judicial determination, and then you make a decision.
[18:50:00]
Here, there was a decision made years ago saying you can stay, and then the Trump administration says, no, you are leaving. That's a problem. So, I would hope that the Supreme Court weighs in on the merits. I would hope that the Supreme Court gives an opportunity for people being picked up off the street and sent to other countries to at least state their case as to why they're not what they're being alleged to be. And I would hope the Supreme Court intervenes and says that if someone was taken out of here illegally, they should be brought back. That remains to be seen. We'll know soon.
QUEST: We'll know soon. I'm grateful for you, sir, as always. Thank you. And this is CNN. I'll be back in a second, hopefully.
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QUEST: President Trump has welcomed the World Series Champion Los Angeles Dodgers to the White House. The president praised baseball superstar Shohei Ohtani and several other players for their achievements last season. The long-time pitcher Clayton Kershaw presented Mr. Trump with a number 47 Dodgers Jersey.
Now, in just a few hours, the Houston Cougars will face off against the Florida Gators. We're talking about the final round of the men's college basketball championships. Soon the University of Houston will tip off against University of Florida at St. Antonio Alamodome. Coy Wire caught up with the two head coaches on Sunday to reflect on the March Madness journey.
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COY WIRE, CNN SPORTS ANCHOR: If Saturday night's Final Four is any indication of what we're in for for Monday night's National Championship game, buckle up. I just sat down with each of the two coaches who've led their teams to this point.
The Florida Gators took down top over all seed Auburn in a boxing-like basketball brawl. Team's going blow for blow. Coach Todd Golden's team is built with a bunch of underdogs, many of whom were overlooked coming up like their star, Walter Clayton Jr. I asked coach just a bit ago what he'd say is the defining characteristic of the young men on his team.
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TODD GOLDEN, FLORIDA GATORS HEAD COACH: I'd say, resilience, you know. We've had that -- been able to put that on display in the NCAA tournament really all year. But obviously, we have great talent. We have some special players on the floor, but our mental toughness and our resilience have been a big part of our ability to make it to this national championship.
WIRE: Clayton, my goodness. Just going off of you guys, how do you put into words what he means for this team?
GOLDEN: You have to have some really special players just so it'll be alive, you know, one of the last two teams standing, and not that Walter has been an elite leader for us all year. And really showing the world, you know, what he's capable of over these last five games in the NCAA tournament. Really dating back to the SEC tournament as well. Just a great leader and a great player and someone that his teammates have a lot of respect and belief in and is answered the bell every step along the way for the Florida Gators this year.
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[18:55:00]
WIRE: Houston got here by shocking Duke and the world, pulling off one of the most thrilling comebacks the Final Four has ever seen. And they didn't do it with mega stars, they did it with grit. Look at them training ahead of this long season, running before the sun's up, averaging about a five-minute mile as a team. 69-year-old coach Kelvin Sampson started his head coaching career at Montana State 44 years ago, and he's always had to overcome the odds and he trains his players to persevere too.
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KELVIN SAMPSON, HOUSTON COUGARS HEAD COACH: I wasn't going to out recruit UCLA or Arizona at those schools, but that didn't mean we could not compete them. We couldn't play harder than they did, prepare harder, develop a chip on their shoulder. When you coach at the Montana, Texas to Washington States, you always have a chip on your shoulder. And for me, that chip has never left my shoulder.
(END VIDEO CLIP)
WIRE: With that chip on the shoulder mentality, Coach Sampson hopes it'll bring his and Houston's first ever National Championship while the Florida Gators are looking for their first national title in 18 years.
Coy Wire, CNN, San Antonio.
(END VIDEOTAPE) QUEST: I am grateful for your company this evening. I'm Richard Quest. All this morning, if you're just starting your Tuesday, because the news never stops. This is CNN.
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