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U.S. Stocks Fall As Euphoria Over Trump's Tariff Pause Fades; Russia Frees Ksenia Karelina In Prisoner Swap With US. Trump Admits "Transition Problems" as Markets Drop; U.S. House Approves Budget Blueprint to Unlock Trump Agenda; Death Toll Rises from Nightclub Roof Collapse; Golf's Masters Underway with Justin Rose in the Early Lead. Aired 1-2a ET
Aired April 11, 2025 - 01:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[01:00:26]
JOHN VAUSE, CNN ANCHOR: Reality bites for Wall Street. Ahead on CNN Newsroom.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: We think we're in very good shape. We think we're doing very well.
(END VIDEO CLIP)
VAUSE: As Donald Trump pushes on with his tariff war.
(BEGIN VIDEO CLIP)
JANET YELLEN, FORMER TREASURY SECRETARY: President Trump is taking a wrecking ball to it.
(END VIDEO CLIP)
VAUSE: Being the U.S. economy and fears of lasting damage caused by days of tariff turmoil.
(BEGIN VIDEO CLIP)
TRUMP: Dana's an incredible guy and we spoke to President Putin about it and they made a deal.
(END VIDEO CLIP)
VAUSE: And that's how American Ksenia Karelina, jailed in Russia, was set free in a prison exchange with Moscow.
UNIDENTIFIED MALE: Live from Atlanta. This is CNN Newsroom with John Vause.
VAUSE: It seems reality bites a day after an historic relief rally on Wall Street with realization that Donald Trump's global trade war is only on hold. It's not over. And U.S. tariffs remain in place at levels not seen since the 1930s.
Well, at the same time, Washington and Beijing are locked in a tit for tat tariff fight, which took another turn for the worse on Thursday. During a Cabinet meeting, President Trump clarified the tariff on Chinese imports stands at 145 percent, not 125 percent as many had initially been told.
White House officials say the president is waiting for Beijing to break this impasse. For financial markets, another beating with the Dow losing two and a half percent. The Nasdaq and the S and P 500 were also down sharply. The U.S. President was unable to comment on yet another bloodbath on Wall Street because he wasn't across the numbers.
(BEGIN VIDEO CLIP)
TRUMP: I haven't seen it because I've been here for two and a half hours. So I'll be saying and I think. Scott want to have. Scott, you want to have a statement on that?
SCOTT BESSENT, U.S. TREASURY SECRETARY: Sure. Look, the up 2 down is not a bad ratio or up 10 down 5.
(END VIDEO CLIP)
VAUSE: Let's take a look at the U.S. futures on opening about nine hours from now. So it's pretty much flat across the board. It was that way last hour continues to be. So let's take a look trading in Asia, it is underway. The Nikkei is down by four and a third percent. Hong Kong down or up rather by almost 3/4 of 1 percent. Shanghai also kind of in positive territory while Seoul is down by almost 1 percent. Notable that Hong Kong and Shanghai also had the benefit of support from Beijing.
Live to Seoul and CNN's Mike Valerio. So the fallout from a trade war between the world's biggest and second biggest economies will not be limited to China and the United States.
And on top of that, countries across the Asia Pacific region are now trying to limit the impact of U.S. tariffs on their own economies. This seems to be a one, two punch which is coming directly from Donald Trump.
MIKE VALERIO, CNN CORRESPONDENT: That's right, John. And you know, I like how you've been talking to our business editor Richard Quest about even though there seems to be from the White House the desire to have a deal with allies Japan and South Korea, which are leading declines in this neck of the woods at this hour.
You know, you were talking to Quest that a deal with 70 countries in 90 days historically takes a little bit of a lift. It takes a second for those deals to come together in a second. I mean, very complicated and usually takes years to make some sort of free trade deal among these very complex economies. So all of this uncertainty is certainly leading to declines in Seoul
and Tokyo markets in China, both Hong Kong in the mainland, the Shanghai composite in barely positive territory right now. But all this uncertainty leading to trouble in the U.S. bond market.
The 30-year treasury yield around 4.95 percent, the largest weekly increase since 1982. The 10-year treasury yield around roughly 4.5 percent. A day earlier, 4.28 percent. Definitely trending in the wrong direction.
Let's take a listen to some reaction. We're going to hear again from former Treasury Secretary Janet Yellen, her unvarnished opinion, as well as Trump ally Kevin O'Leary, who you may recognize from Shark Tank, a big Trump supporter. Let's listen in.
(BEGIN VIDEO CLIP)
YELLEN: This is the worst self-inflicted wound that I have ever seen an administration impose on a well-functioning economy.
KEVIN O'LEARY, CANADIAN BUSINESSMAN AND CO-HOST, "SHARK TANK": What Yellen forgot to tell you there is China does a lot of IP theft and has for decades has never ever been compliant with the WTO since 2000 when they went in and the amount of theft they do in Europe and the United States in terms of IP.
[01:05:07]
And then produce those products and sell them back in those markets at discounted prices because they don't have to pay for R and D. It's beyond abusive.
(END VIDEO CLIP)
VALERIO: So the main question here, who is going to talk to whom first between D.C. and Beijing? When can those conversations possibly happen? That would have a great effect in terms of calming the jitters of these markets. So the latest comments we have from Beijing, this is from the Chinese Commerce Ministry and a spokesperson says in part quote, the door to talks is open, but dialogue must be conducted on the basis of mutual respect and equality.
And when we're talking about mutual respect, John, our team from the White House and D.C. at large on CNN.com has a new article talking about the back and forth between Beijing and DC. Apparently, through their reporting, President Trump is not willing to initiate a phone call first to xi Jinping. From DC's point of view, the call has to come from China and it has to be at a high level.
But as Steven Jiang, you know, our Beijing bureau chief, was saying yesterday in his reporting he's conveying today that is not Xi's style. He usually likes to have lower level officials iron out the deal and then Xi comes in and puts the bow on top of the package.
So we are going to be seeing what China does next for what it's worth. New reporting from John Lu coming in from Hong Kong. Xi will be visiting Vietnam, Cambodia and Malaysia trying to get new allies in this fight. And as we look at who blinks first, John.
VAUSE: That is the question, the trillion dollar question right now, I guess. Mike, thank you. Michael Valerio in Seoul.
We'll stay with the story for a little longer. Let's go live, Los Angeles. And Robert Koepp, director of the Asia-Pacific Geoeconomics and Business Initiative at Chapman University. Thank you for being with us.
ROBERT KOEPP, DIRECTOR, ASIA-PACIFIC GEOECONOMICS AND BUSINESS INITIATIVE AT CHAPMAN UNIVERSITY: Thank you, John.
VAUSE: OK. So in a note to clients on Thursday, Deutsche Bank wrote this. The world is on course for a disorderly economic decoupling between the world's two largest economies. So if these record high tariffs remain in place between the United States and China, at what point does trade actually stop altogether and these two economies really do actually decouple.
KOEPP: Well, in terms of trade stopping altogether, I assume they're meeting between the U.S. and China, that probably won't happen. There are some absolutely necessary materials, for example, rare earths that we purchased from China. They would also have certain types of technology that we produce that they're going to still want no matter what, but it will definitely curtail it.
And the decoupling, yes, that's what it seems the White House is wanting to achieve as soon as possible, but that would take a matter of years. There's just no getting around that fast a decoupling of these massively integrated economies.
VAUSE: Yes. Decoupling also comes with a lot of other consequences. You know, countries that trade together usually don't go to war with each other. So once you take these ties away, there's a lot less reasons to talk to each other.
KOEPP: Yes, but, you know, trade. Well, I'll just agree with that. Yes, I mean, I will agree with you, but also say that sometimes trade doesn't prevent war either. You really need communication. You were previously in the reporting that preceded this, having the discussion around how communication has really failed between the White House and Beijing. And I think that's at the crux of the issue. I mean, the best way to both solve trade issues and mitigate the possibility of war is to have good dialogue.
VAUSE: Well, in his public remarks, the U.S. president is sounding optimistic still about a deal with Beijing. That's what he said.
(BEGIN VIDEO CLIP)
TRUMP: Sure that we'll be able to get along very well. I have great respect for President Xi. He's been, in a true sense, he's been a friend of mine for a long period of time, and I think that will end up working out something that's very good for both countries. I look forward to it.
(END VIDEO CLIP)
VAUSE: Here's the thing. But Xi and Trump have risen to power with a nationalistic agenda. Both have promised their countries will be respected, even feared. Both are trying to build this reputation, strong leaders who just don't back down. So in that context, how difficult will it be to find an off ramp?
KOEPP: Well, I think one of the first problems is exactly, in Trump's words, he's delusional, thinking that Xi is truly his friend. Xi is not his friend. He is vilified by China. That's through the propaganda arm of the Chinese Communist Party that Xi controls.
So, you know, there's really no love between them. It seems to be in Trump's mind, but it's really not in China's mind or moreover, his inner circle. So, I think in terms of finding an off ramp, yes. As pressure comes to bear, there are possible solutions.
[01:10:00]
They can start looking at things like initiating a dialogue and they can have some sort of agreement, say around, oh, educational exchange even, which is field I'm very active in or doing something else that's sort of constructive but not directly related to trade. And then they could say, well, we've seen some positive movements so we'll both lower together.
And if they do it simultaneously, they can both claim without, you know, asserting the other loss that they have kind of won without having an outright victory. And that would be the kind of solution, I think that's possible.
VAUSE: So in 2023, China's total exports to the world valued at almost $3.5 trillion. 13 percent of that or $436 billion of all exports went to the United States. If China stops exporting because of tariffs or whatever, you know, in a major way to the United States, where do those exports end up going? Who buys them?
KOEPP: That's the problem right there. And it's not just a matter of purchasing. I mean the consumers around the world will be very eager to purchase these very low priced bargain basement Chinese goods. You're talking about a dumping situation and that's also a reason for legitimate trade frictions.
In fact, that's been going on for years, not just with the U.S. and China, but say the E.U. and China, other trading partners. They accused China of dumping. In a previous generation, Japan was accused of dumping, so were the Asian tiger economies.
So this is a pattern you see, the thing is China has done it at such scale and the potential impact this time, just as you said, having those hundreds of billions of dollars worth of goods now seeking markets at any price because otherwise it's just a write off and dumped into the ocean that could cause really big repercussions globally.
VAUSE: And just very quickly to end on here. In recent years, one of the challenges for Beijing has been to try and reform their economy away from this export driven model to rely more on domestic consumption. So they get into a situation like this. Could this crisis actually be an incentive to speed up that process?
KOEPP: Well, it should be. Beijing logic is sometimes different from the rest of the world's logic. Just you said this has been a point that's been raised for years. China is way behind the curve on having consumption drive its economy instead of exports. And one of the problems is Xi's objective, just as you were talking about, it's a nationalistic agenda. He's wanting to keep that manufacturing base and exert power through that.
VAUSE: Robert, thank you so much for staying up and being with us. We really appreciate your insights and your experience. Appreciate it. Robert Koepp there in Los Angeles.
KOEPP: Thank you, John. Appreciate it.
VAUSE: You're welcome. Take a short break. When we come back, another prisoner exchange between Washington and Moscow with American Ksenia Karelina now back in the US. So who did the Russians get in return?
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VAUSE: After more than a year locked up in a Russian jail, dual Russian American citizen Ksenia Karelina has been set free as part of a prisoner exchange with Moscow. A short time ago she arrived at Joint Base Andrews just outside Washington. The 33-year-old was convicted on charges of treason and received a 12-year sentence. Her crime was a $50 donation to a charity supporting Ukraine. Details now from CNN's Fred Pleitgen.
(BEGIN VIDEOTAPE)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): In the darkness of night, Ksenia Karelina brought to a Russian airfield for what would be her flight to freedom. President Trump praising Russian leader Vladimir Putin after the prisoner swap.
TRUMP: We spoke to President Putin about it and they made a deal. They released the young ballerina and she is now out. And that was good. So we appreciate that. We hope that we're going to be able to make a deal relatively soon with Russia and Ukraine to stop the fighting.
PLEITGEN (voice-over): The actual exchange in Abu Dhabi, Ksenia Karelina passed by Russian German citizen Arthur Petrov, charged in the U.S. with trying to acquire microelectronics for the Russians to be used in weapons manufacturing.
Ksenia Karelina was sentenced to 12 years in a Russian labor camp for allegedly donating about $50 to an NGO supporting Ukraine, which a Russian court ruled to be treason. Russian born but with U.S. citizenship and living in L.A., Ksenia Karelina is an amateur ballet dancer. And supporters say she was arrested after flying to visit family members living in Russia.
Her fiance tirelessly lobbying for her release, including here on CNN.
CHRIS VAN HEERDEN, KSENIA KARELINA'S FIANCE: It's painful to see this, knowing who this woman is by heart. I see helpless. I see someone that's just crying for help, hopeless. Someone is that's afraid. That's what I see.
PLEITGEN (voice-over): But now a big smile. Ksenia Karelina on a U.S. government plane headed back to America. This image Posted by the U.S.'s Special Envoy for Hostage response Adam Bowler. She's the second American freed by the Trump administration after teacher Marc Fogel was released by the Kremlin in February.
MARC FOGEL, AMERICAN DETAINED FOR MERE THAN THREE YEARS IN RUSSIA: I want you to know that I am not a hero in this at all. And President Trump is a hero.
PLEITGEN (voice-over): Sources telling CNN the swap for Karelina shaped up when one of Russia's top negotiators, Kirill Dmitriev, was in Washington last week.
KIRILL DMITRIEV, SENIOR RUSSIAN NEGOTIATOR: I think there is already progress on some trust building measures. You know, there were some prisoners exchanged and there is a discussion of what the end game can be.
[01:20:00]
PLEITGEN (voice-over): But the Ukraine ceasefire the Trump administration has been seeking is nowhere in sight. This video posted by Ukraine's 3rd Assault Brigade claiming to show their troops storming a village in eastern Ukraine. But for now, the Trump administration continues its diplomatic offensive, offering Moscow much improved ties if a peace deal with Ukraine is achieved. Fred Pleitgen, CNN, Berlin.
(END VIDEOTAPE)
VAUSE: Benjamin Radd is a Political Scientist and Senior Fellow at UCLA's vocal center for International Relations. Welcome back. It's good to see you.
BENJAMIN RADD: Thank you for having me back.
VAUSE: OK, so we now know why Ksenia Karelina was actually chosen to be part of this high level prisoner exchange. The U.S. President says it all began with a request from a friend, the CEO of Ultimate Fighting Championship, Dana White.
(BEGIN VIDEO CLIP)
TRUMP: Dana White called me and he said it's the friend or the relationship of one of the fighters for UFC or one of the fighters. And Dana is an incredible guy. And we spoke to President Putin about it, and they made a deal. (END VIDEO CLIP)
VAUSE: So is that the usual process? Is that how these things usually work?
RADD: No, and we don't necessarily need to take that at face value. We don't exactly know what the circumstances were, whether this was part of the expression low hanging fruit, meaning an easy candidate for a prisoner exchange, someone who is held on the minor offenses. And there's little that Putin needs to do to justify that or to save face.
And this is a, you know, this is a administration in the U.S. that is seeking a diplomatic victory somewhere. It's been a rough few weeks to say the least. Not what with the whipsaw back and forth with the tariff issues, and then also the stalemate now and the attempts by the Trump team to reach a settlement, a peace settlement or a cease fire agreement between Ukraine and Russia.
So really, I see here is President Trump and his team looking for a diplomatic victory somewhere and finding this easy opportunity, relatively speaking, to do so.
VAUSE: There are still a number of Americans being held in Russian jails. Among them is Stephen Hubbard, Travis Leake, Gordon Black, Robert Woodland, David Barnes, whole lot more. Now, if only they had connections to the UFC. Look, what about their fate? What happens to them?
RADD: Well, I don't see this as tied to the fate of the remaining captives there, the prisoners who are being held by the Russians. I mean, this is a move that the Russians have indicated that they will continue to pursue. It serves them to do so. It gives them bargaining chips in their negotiation with the United States to loosen the sanctions or reverse the sanctions, roll back some of the harsh measures that were put in place after the invasion of Ukraine and also to help restore ties with the United States and to thaw the diplomatic chill between the two countries.
But really this should be seen as part of a broader picture to accomplish those objectives and not necessarily part of a chain of events that would lead to future releases of prisoners being held.
VAUSE: What does seem notable in all of this is that this prisoner exchange happened while those talks continued in Istanbul about upgrading the U.S. embassy in Moscow. Very practical discussions which underway. And this is the second prisoner exchange in a matter of months, but which is, I guess, on the positive side of the diplomatic score.
But these talks about a cease fire in Ukraine have now stalled, mostly because of Moscow, and yet they're still having this warming of diplomatic relations. So explain the connection between all these things.
RADD: Yes, and I think that we see an instance where President Trump is trying to give Vladimir Putin every and any opportunity to have the perception shift of the Russians in the sense that they're the ones dragging this conflict out. They're the ones that were the aggressors. They're the ones that are now holding up any ceasefire deal.
And so we see President Trump time and time again saying to Vladimir Putin, look, here's a window that you have. Jump through it, demonstrate, show goodwill. We're going to give you the benefit of the doubt over and over, despite what we're not getting in return.
And I think what we're seeing here is, you know, starting again with one of the more easier prisoner exchanges to do based on the charges against her and to demonstrate that, OK, this is an attempt to get that momentum going.
And it's, again, it's not perceived as a build up to future prisoner exchanges. I think these things stand in isolation from each other. What they don't stand in isolation from are the broader geopolitical events. And in this case it is the Ukraine stalemate.
And again, the fact that the President has had a really rough last two weeks internationally speaking and in many ways probably felt diplomatically isolated. And here he's working with an ally, the UAE, to help facilitate this. So it shows that -- shows it as a diplomatic win for the United States.
VAUSE: In some ways, is it a reflection of the fact that the ceasefire in Ukraine just doesn't seem to be as big of a priority for this White House as improving relations with Moscow?
RADD: Well, I think that for the, for this White House, it is seen as, you know, it's putting the cart before the horse. Improving relations with Moscow, it probably views as will beget a better situation with regards to the Ukraine conflict.
[01:25:02]
In other words, appease Putin or make Putin feel like he's gaining something diplomatically, internationally, not feeling as isolated. And then he might be more amenable to a resolution or settlement on the Ukraine conflict, even if it's not with stakes that favor the Ukrainians as it stands. So absolutely, I think that this is really meant to sort of soften those that pathway to negotiations there.
VAUSE: Benjamin, thank you for being with us. Ben Radd there in Los Angeles, thanks for staying up. Appreciate it.
RADD: Thank you.
VAUSE: As we mentioned, the prisoner exchange took place the same day U.S. and Russian officials met in Istanbul for a second round of talks about upgrading services for the US embassy in Moscow.
According to the U.S. Secretary of State, right now the embassy is barely operational because of restrictions imposed by the Kremlin in recent years, including a ban on hiring local staff as well as no access to the local banking system. Both sides have agreed to continue talks in the near future. But when it comes to the U.S. economy, the view from the White House
is upbeat and jolly hockey sticks. So why are so many experts predicting a recession? We'll have the one and only Richard Quest in just a moment.
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[01:31:18]
JOHN VAUSE, CNN ANCHOR: Welcome back, everyone. You're watching CNN NEWSROOM. I'm John Vause.
Well, the White House is clarifying the tariff rate on Chinese imports is not a staggering, unprecedented 125 percent, as many were initially told, but instead it's 145 percent. And that was one reason for a bloodbath on Wall Street.
And as President Trump met with his cabinet, he acknowledged what he called transition problems with his trade policy, but insisted everything will turn out beautifully.
White House officials tell CNN they're expecting China to make the first move to work out a deal.
Let's take a look at the U.S. futures at the opening in a few hours from now, the Dow up by almost half a percent. This is the expectation on opening, the Dow up by more than half a percent. Nasdaq up by three quarters of 1 percent.
Let's look at Asia. The trading is underway -- continues as the Nikkei in Japan, in Tokyo rather, down by 3.5 percent. Hong Kong is up in positive territory by 1 and just over a quarter of a percent. Shanghai up a third of a percent, sold down by almost 1 percent. Hong Kong and Shanghai are the two markets which are receiving some kind of indirect support from Beijing.
Joining us now from New York is CNN Business editor at large and host of "QUEST MEANS BUSINESS", Richard Quest. It's good to see you again.
RICHARD QUEST, CNN BUSINESS EDITOR AT LARGE: Good to be with you, sir.
VAUSE: Ok. So a day after hitting pause on some of his tariffs, not all, the U.S. president had this assessment of just how well this tariff policy is working out.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We think we're in very good shape. We think we're doing very well.
Again, there will be a transition cost and transition problems. But in the end it's going to be -- it's going to be a beautiful thing.
(END VIDEO CLIP)
VAUSE: So just a few transition problems or as some may have suggested, the last few days have caused serious and lasting damage to the U.S. economy. Where do you stand?
QUEST: I think that it's a combination of both, in the sense that the -- you divide it into -- neatly into two groups.
There is the damage that's been done and is being done by these very high tariffs on China, which is 14 percent of U.S. imports, 10 percent general tariff around the world, auto tariffs, pharmaceutical tariffs to come, steel and aluminum tariffs.
So that is already baking the cake towards recession. That's one group.
And then the second side is now the process that's going on with all the other countries that have come forward with proposals.
But if you look at those tariffs still in place -- this is huge, John -- this is a massive, massive drag on global trade as the United States unilaterally rewrites the rules.
VAUSE: We also heard from the Treasury Secretary on Thursday. And he had this assessment -- very rosy assessment, if you like -- of the U.S. economy. Here he is.
(BEGIN VIDEO CLIP)
SCOTT BESSENT, U.S. TREASURY SECRETARY: We had very good inflation numbers today. Oil's down. We had a successful bond market. So I don't see anything unusual today.
(END VIDEO CLIP)
VAUSE: Yes I mean the trend line on inflation is good but it's a snapshot of where the economy was. A fall in the price of oil is often because, you know, expectations that economic growth is likely to slow.
The bond market, I guess being back from Armageddon is a good thing. No mention of the stock which is the leading indicator. You know, this is very much cherry-picking of facts to fit the argument.
QUEST: Completely and did you listen to Janet Yellen who was talking to our colleague on (INAUDIBLE) earlier. Janet Yellen said that the Trump administration is taking a wrecking ball to the economy -- a well-functioning economy was how she put it.
[01:34:48]
QUEST: To there is absolutely no justification for the rosy scenario that the Treasury Secretary painted, bearing in mind the fact that others have said the economy is weakening even as we speak.
VAUSE: Now that we know tariffs are once again a negotiating tactic --
QUEST: Yes.
VAUSE: -- there's still a lot of negotiations now which have to take place. These trade talks are with dozens of countries. What is the plan for these talks, which could take months if not possibly years?
QUEST: Traditionally, yes. It would have taken many, many months, either bilaterally or through the WTO. But I think this time they're hoping it's going to be a great deal quicker, because the sword of Damocles, of the -- of the tariffs is hanging over the market.
And anyway, when they all sit down they have this document. It's the foreign trade barriers. These are what the United States has identified as the real problems.
Let's take South Korea. Here's an example from this. What they say is South Korea, it's things like unclear package rules, onerous biotech approval processes, government procurement, regulations on car emissions.
Vietnam has a whole other range of non-tariff barriers which relate to price controls, vehicle imports, ban on offal products.
And you'll be familiar with this, John, Australia. This is the sort of thing that they're going to be going after with Australia. Complex approval processes for various agric and apples and pears prohibited.
So they know what they're talking about when they sit down to negotiate. The U.S. is basically going to say get rid of these and we'll take away the tariffs.
VAUSE: You know, do you know the Jewish parable about the man who complains to the rabbi about living in a small, overcrowded house? The rabbi tells him to get a goat, let it live inside, makes everything a thousand times worse. Eventually, the rabbi tells him to get rid of the goat, and the man can't believe how much better everything is.
So I'm just wondering if Donald Trump -- did he remove the goat on Wednesday with his tariff pause? But on Thursday, the markets realized that the war is still ongoing and the highest tariffs since the 1930s are still in place?
QUEST: Well, I think your parable is very good, especially since its Pesach next week. And so one can identify. And yes, well, he sort of took the goat out and then put all the chickens back in.
VAUSE: Yes.
QUEST: And he added a few cows because outside this house is the, you know, it's just the stench of all these other tariffs.
And there's just no way -- the markets can't be fooled. The markets know what's going to happen. And the chance of a recession is still up to 50 and beyond 50 percent.
VAUSE: Richard, good to have you with us. (INAUDIBLE)
QUEST: Thank you very much.
(CROSSTALKING)
VAUSE: See you again soon.
Republican leaders in Congress have put down a short-lived rebellion within the party which threatened passage of the president's proposed budget. After a few holdouts were won over, the Senate approved the White House budget plan Thursday, a crucial step forward for Trump's overall agenda.
CNN's Manu Raju has details.
(BEGIN VIDEOTAPE)
MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: After a furious effort by the House Republican leaders, they ultimately got what they wanted, which is the narrowest passage of a budget blueprint that will set the stage for moving on the larger Trump agenda.
Now, this came after weeks of wrangling behind the scenes and really an intense 24 hours as the Speaker of the House Mike Johnson, met with a number of conservative holdouts, pressuring them to get in line behind the bill, making some promises, particularly over the issue of cutting federal spending.
There had been a disagreement between House Republicans and Senate Republicans about how deep to go in terms of spending cuts. And they had won some assurances, verbal assurances that when they move on the larger plan, that ultimately they would seek about $1.5 trillion in spending cuts.
And ultimately, that got enough Republicans on board to get this over the finish line, at least this first step over the finish line by 216 to 214 votes, two Republicans voting against it. Really, no margin for error for the Speaker of the House to get this over the finish line.
Now, in catching up with some of these members afterwards, they are warning that the next step of the legislative process must lead to a legislation that does not deviate from those assurances, must cut federal spending by that amount -- $1.5 trillion, even as some Republicans are concerned about cutting that deeply.
And if it comes back with reconciliation bill less than $1.5 trillion.
REP. RICH MCCORMICK (R-GA): Not going to get done.
RAJU: You're not going to vote for it.
MCCORMICK: I promise you, you have not just, just me. You'll have 30 people that won't vote for it.
RAJU: You'll vote against anything that comes back on a reconciliation bill under $1.5 trillion. Is that true?
REP. ANDY OGLES (R-TN): That's right. We've got to hit that target. That's -- again, this is why President Trump won. Weve got to hold our word, hold leadership their feet to the fire.
RAJU: Are you confident that Medicaid will not be touched as part of these cuts?
[01:39:47]
REP. NICOLE MALLIOTAKIS (R-NY): Well, we've made it very clear to the Speaker that we will not support something that changes eligibility, that would strip benefits from our constituents. It's as simple as that.
I don't really believe that the number will be 1.5 trillion. I think that it probably will come in a little lower.
RAJU: And again, this is just the first step in the process. The passage of this budget blueprint is just something that allows them to move ahead with the actual details of the legislation.
They have to actually draft those details, which not only includes the spending cuts. Where are those cuts going to come from? That's one question.
But also the issue of a major overhaul to the U.S. tax code. That is such a complex and huge undertaking that they are still weeks away, perhaps months away from getting anywhere close to resolving as well as significant amount of money to carry out Donald Trump's immigration enforcement measures, in addition to more projects for energy drilling, oil drilling and the like. All those will be part of this legislative package.
And one other key thing here as well -- raising the national debt limit for two years. That's what Donald Trump wants to avoid a debt default and not to have to negotiate with Democrats.
So all these complex issues must be rolled into one package, must get Republicans on board because we expect every Democrat to vote against it. And with the narrowest of margins in the House and the Senate, it's going to be an enormous undertaking to get it done.
But the Speaker at least can breathe a sigh of relief that the first step is done. But many more steps to go before this can ultimately become law.
(END VIDEOTAPE)
VAUSE: The death toll rises from the nightclub roof collapse in the Dominican Republic as authorities call off the search for more victims. We'll have the very latest from Santo Domingo in a moment.
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VAUSE: A family visiting from Spain is believed to be among the six victims who died when a helicopter crashed into New York's Hudson River on Thursday.
A quick warning here some viewers may find these next images disturbing. This is the moment the helicopter came down. Small pieces of debris
could be seen breaking away from the chopper as it plummeted into the river.
The helicopter was on a sightseeing flight, had flown past the Statue of Liberty, the George Washington Bridge, before crashing. FAA records show the 20-year-old chopper had a valid airworthiness certificate. Still no word on the cause of this tragedy.
Authorities in the Dominican Republic have ended their search for more victims amid the debris of a collapsed roof at an iconic nightclub. The death toll is now officially 225, at least 189 others were injured in Tuesday's disaster.
And now, as families bury their loved ones, authorities are searching for a cause.
CNN contributor Stefano Pozzebon has details.
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STEFANO POZZEBON, CNN CONTRIBUTOR: Rescue workers stand on the sidelines, watching as the massive cranes and trucks leave the scene of the deadly nightclub collapse. Nearly three days after the roof of the popular jet set club caved in, the search for survivors comes to an emotional end.
The director of emergency operations breaking down as he thanked his crews, who saved nearly 200 people. But more than 220 lives were also lost, and it's not clear how many are still unaccounted for. The cause of the collapse hasn't been determined.
VICTOR ATALLAH, DOMINICAN MINISTER OF PUBLIC HEALTH: I don't think we can say anything about the investigation because the investigation has not even started.
POZZEBON: Rescuers worked around the clock, combing through the rubble, but no one has been found alive in the last 24 hours.
ATALLAH: We have no more bodies. And the. The whole area looks -- seems to be covered. So I don't think -- we don't expect any more recovery.
POZZEBON: The majority of the bodies have been taken here at the Institute of Forensic Medicine. And here is where the painful process of autopsies and identification can take place.
The waiting area is chaotic and hot. Many wear masks because the smell of decomposition is so strong.
Family members comfort one another as they wait for news. Angel de Los Andes tells us his cousin died at the nightclub less than four months after the death of her father.
"She was the light of the family," he says. "So smiley, so cheerful, so talented." The whole nation is in mourning. Hundreds lined up to pay their
respects to legendary singer Rubby Perez, who was performing at the time of the collapse.
Dominican President Luis Abinader watched as Perez's daughter made a powerful farewell to her father.
Mourners outside singing his music and saying their final goodbyes to a man they considered an idol, an icon, and a brother.
Funerals like this are just the beginning for a country trying to cope with unbearable loss.
Stefano Pozzebon, CNN -- Santo Domingo.
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VAUSE: In a moment, kind of a micro space race with a Scottish rocket company saying it has a faster way to deploy satellites with so-called space taxis that could transform the entire space industry.
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VAUSE: The quest for the coveted green jacket has teed off with American Justin Rose grabbing a three-stroke lead at the Masters. Three golfers, including defending champion Scottie Scheffler, are bunched up in second place. Scheffler and Rory McIlroy is far back in this first major of the season.
CNN's sports Don Riddell reports now from Augusta National.
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DON RIDDELL, CNN SPORT WORLD ANCHOR: The 44-year-old Englishman, Justin Rose, has had a phenomenal day here at Augusta, shooting a seven under par score to open his Masters tournament challenge here in 2025 leading by a comfortable margin now.
He is one of the most respected players in the game. He's a former U.S. Open champion. He's an Olympic champion. He had chances here, most notably in 2017 when he lost a heartbreaking playoff to Sergio Garcia.
But he's comfortable here and he knows that he's still got the game to win a green jacket.
JUSTIN ROSE, PROFESSIONAL GOLFER: I feel like I've played well enough to win this tournament. I just feel like I don't have the jacket to prove it.
I think you always feel self-pressure to add more for sure. I do feel that I could make a statement with how well I play in the back end of my career. That's a great opportunity though for me, not a pressure.
From my point of view, that's a lot of fun today. And that's what I'm in the game for, is to feel these experiences.
RIDDELL: Of course, there are still three rounds to go here at Augusta, and one of the men breathing down Justin Rose's neck is surely going to be Scottie Scheffler. The world number one and defending champion is hoping to become only the second player after Jack Nicklaus to win three green jackets in the space of just four years.
And he played superbly on Thursday, shooting a four under par round. And he didn't drop a shot.
SCOTTIE SCHEFFLER, DEFENDING MASTERS CHAMPION: I felt pretty good about it. I had a feeling the golf course was going to get pretty firm and you know, the areas to hit your irons out here are pretty small, and they get even smaller when the greens are firm. And so there's definitely some challenge to the golf course today. And I'm sure that will continue as the week goes on.
I think anytime you get closer to the lead, it's going to be easier for you to win the golf tournament. That's just -- I mean, a simple fact of the matter. You got off to a good start, statistically, you're going to have a better chance to win the tournament.
RIDDELL: But unfortunately, not everybody plays well at Augusta. It is a brutal test of golf and spare a thought for the 21-year-old American, Nick Dunlap. He turned professional just last year.
This is only his second Masters appearance, and he had an absolute disaster shooting an 18 over par score of 90. That was more than twice as bad as the next worst score here on Thursday.
He had a very, very difficult round and I'm sure he can't wait to get back out here on Friday and try to do a lot better. That will have been a really painful experience.
Back to you.
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VAUSE: Thank you Don.
Call it a mini space race. The rush to develop smaller, more nimble rockets to transport smaller payloads into orbit. And one Scottish company says its creating a space taxi service, which will ultimately save satellite companies time, but I guess, more importantly, money.
CNN's Max Foster explains.
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MAX FOSTER, CNN CORRESPONDENT: Space the final frontier. It's a conversation that has picked up again, with plans to return people to the moon in 2027 and even walk on Mars in the 2030s.
But alongside the super-heavy rockets we see on the news, there's a race to create more nimble craft. And there are few places that race is more clearly evident than the old shipbuilding city of Glasgow.
DEREK HARRIS, BUSINESS OPERATIONS MANAGER, SKYRORA: Around the central belt of Scotland, there's more satellites made anywhere in the world outside of Silicon Valley.
[01:54:49]
HARRIS: We can have that more bespoke service for them and take them exactly where we want to go.
So while the larger companies out there at the moment are really more of a sort of bus service for the clients out there, they're a little bit cheaper depending on the payloads that you're taking. But you then need to get from where they let you go to your actual destination.
For us, we're more like a taxi ride for them. So we can take our clients to exactly where they need to much quicker. It can save them up to six months in time.
FOSTER: At the moment, Skyrora is test launching its 11-meter Skylark L rocket, gaining valuable data for the development of its main rocket, the 23-meter Skyrora XL.
The XL rocket is divided into three stages. The first stage is the most powerful, using nine of Skyrora's Skyforce 70 kilonewton engines to lift the rocket 60 kilometers or 37 miles into the sky.
The second stage, with just one Skyforce engine, takes the craft the final distance into space, leaving the final stage to drop off its payloads.
HARRIS: The third stage is unique in that it can go and conduct secondary missions, so it could go and refuel another satellite or do some de-orbiting of old space junk or old disused satellites as well.
FOSTER: The U.K. holds the lonely title of being the only country to have the ability to put a satellite into space and give it up.
HARRIS: So back in the 1970s and the late 60s, there was actually a space program in the U.K. It went from Australia in a place called Woomera, and it put up one single satellite called Prospero.
Our commercial work that were doing now is trying to bring that back.
FOSTER: Skyrora designs lean heavily on the Black Arrow and later Blue Steel rocket designs, but at a fraction of the price thanks to one key technological development.
HARRIS: The engines on Black Arrow and Blue Steel, they are manufactured using traditional manufacturing techniques, whereas our engines are manufactured using 3D printing, which helps to save a lot of money and a lot of time.
Basically, it's a bit of a dreamers world at the moment and what you can do and what you can test out really is what I expect in the next few years from the company. (END VIDEOTAPE)
VAUSE: To space and beyond.
Thank you for watching. I'm John Vause.
Please stay with us. CNN NEWSROOM continues after a short break with Kristie Lu Stout reporting out from Hong Kong.
I'll see you right back here next week.
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