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Markets Going in Mixed Territory as Trump Clarifies Tariffs with China; Siemens Executive, Family Dead in a Helicopter Crash at the Hudson River; Russian-American Ballerina Returned to the U.S. Through a Prison Swap; The Masters 2025 Kicked Off in Augusta, Georgia. Aired 3-4a ET

Aired April 11, 2025 - 03:00   ET

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

[03:00:00]

(COMMERCIAL BREAK)

KRISTIE LU STOUT, CNN CORRESPONDENT AND ANCHOR: Hello and welcome to our viewers in the U.S. and around the world. I'm Kristie Lu Stout in Hong Kong. Thank you for joining me.

Now coming this hour, the U.S. President's tariff war hits China even harder. We'll take a look at U.S. stock futures and Asian markets.

Plus, a deadly helicopter crash in New York's Hudson River. An expert explains what likely brought it down so quickly.

And a CNN investigation digs into possible voting misconduct by the U.S. Director of National Intelligence.

UNKNOWN (voice-over): Live from Hong Kong, this is "CNN Newsroom" with Kristie Lu Stout.

LU STOUT: It is 3 p.m. here in Hong Kong, where markets will soon close after yet another volatile day as Donald Trump fires a new shot at China in the worsening trade war. During a meeting with his cabinet on Thursday, the president clarified that Chinese goods coming into the U.S. will actually be subject to at least a 145 percent tariff.

Now meanwhile, Wall Street took yet another beating with the Dow losing 2.5 percent. The Nasdaq and the S&P 500 were also off sharply. Now, the president told reporters there's still some kinks to be worked out.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: We had a big day yesterday. There'll always be transition difficulty, but we had a -- in history, it was the biggest day in history, the markets.

So we're very happy with the way the country is running. We're trying to get the world to treat us fairly.

(END VIDEO CLIP) LU STOUT: Now, new research from the Budget Lab at Yale University says that the Trump tariffs will end up costing the typical middle class American household more than $3400 a year.

Now China's President Xi Jinping is publicly addressing the trade battle with the U.S. for the first time. According to state media, he said this, quote, "there are no winners in a tariff war. And going against the world will only lead to self-isolation."

Now meanwhile, White House officials, they say that President Trump is waiting for China to reach out to the U.S. to resolve the dispute. Kylie Atwood has more on that.

(BEGIN VIDEOTAPE)

KYLIE ATWOOD, CNN U.S. NATIONAL SECURITY CORRESPONDENT: Well, listen, the Trump administration has been telling Beijing, has been telling Chinese officials repeatedly over the last two months that they should be requesting a phone call between President Trump and President Xi.

According to senior White House officials who spoke with our colleague Alayna Treene, President Trump believes that China needs to make the first move here. And that's because they have retaliated against his escalatory trade war that has occurred here. And the problem being, however, China has not responded to the U.S. saying that you should be calling Trump here.

The problem is that they believe that President Xi doesn't want to be seen as weak right now. He has an ego. Domestically, he's received some support for standing up to the Trump administration in the face of this spiraling trade war between the two sides.

And then the other factor to consider here is that fundamentally the Chinese system is just at odds with how Trump likes to interact with other world leaders.

The Chinese system likes to prepare ad nauseam for any leader level phone call. They don't want to put President Xi into an unpredictable situation. And so, therefore, they want to prepare for a potential phone call between the two sides.

The problem there is that the old back channel that the national security adviser Jake Sullivan during the Biden administration had with Foreign Minister Wang Yi, the Chinese have been saying that they are willing to get that channel up and running. But the White House does not want to engage with Wang Yi. They do not view him as someone who is trustworthy.

They have been saying that there are other Chinese officials that we will deal with who are in President Xi's inner circle, but China hasn't been responding.

So as you can see here, this is an incredibly challenging moment for the two sides because there's not high level dialogue happening to prepare for any sort of phone call between these two leaders to potentially steady the ship as this economic trade war only gets worse by the day, by the hour.

(END VIDEOTAPE)

LU STOUT: Now for reaction from the Asia-Pacific region, let's bring in CNN's Mike Valerio live in Seoul for us. And Mike, the trade war continues to escalate. It's hitting global markets, U.S. bonds, even the price of gold.

What is the latest on the fallout here in Asia?

[03:05:02]

MIKE VALERIO, CNN CORRESPONDENT: Well, the markets have closed in our time zone, Kristie, here in Seoul and in Tokyo. Seoul down about half a percent, the KOSPI, Tokyo and the Nikkei down very close to three percent. We did see a rally as the markets are still open in Hong Kong and in Shanghai, solid gains there.

But in terms of why we have these solid declines in Seoul and Tokyo, two reasons. A, investors and traders are realizing that even though the White House is signaling optimism that D.C. does want to make a deal with both Seoul and Tokyo, it could take a minute. And by a minute, we make, we mean, some time for a complex trade deal to come together.

And, you know, a lot of the tariffs that were on that big poster board introduced at the White House Rose Garden the other day, those are on hold for three months. But tariffs on cars, steel and aluminum, those are in effect right now. And whose economies do those tariffs hammer? Look no further than here in South Korea and in Japan.

So something that could help make a deal turmoil in the U.S. bond markets. Let's go to the graphic.

30-year Treasury yields up to 4.95 percent, the largest weekly increase since 1982, according to Reuters. And our John Liu working the phones and crunching the numbers in Hong Kong.

Why that matters, Kristie, is because usually when the market tanks, people go to the havens of U.S. treasuries, the bond market. But right now we're seeing people sell those bonds to compensate for the losses that they're accruing in equities. And frankly, a lot of investors are not trusting the word and the safety of the United States government anymore.

So speaking to that is former Treasury Secretary Janet Yellen. And on the other side of the soundbite, we're going to hear from Trump ally Kevin O'Leary, a prominent Canadian businessman. You might recognize him as a host of "Shark Tank."

Listen to both of these opposing points of view.

(BEGIN VIDEO CLIP)

JANET YELLEN, FORMER U.S. TREASURY SECRETARY: This is the worst self- inflicted wound that I have ever seen in an administration impose on a well-functioning economy.

KEVIN O'LEARY, CANADIAN BUSINESSMAN AND CO-HOST OF "SHARK TANK": What Yellen forgot to tell you there is China does a lot of I.P. 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 I.P. and then produce those products and sell them back in those markets at discounted prices because they don't have to pay for R&D. It's beyond abusive.

(END VIDEO CLIP)

VALERIO: Wrapping quickly, let's go back to those Xi comments that are just in within the past couple of minutes. He is being quoted by Chinese state media, President of China, saying that China and the E.U. should, quote, "Work together to oppose unilateral bullying."

So the headline there is that China is trying to work with the E.U. to combat and confront U.S. tariffs. Nowhere in that readout, Kristie, is there Xi saying, you know what, I'm going to hop on the phone with President Trump. No remarks like that seen just yet, Kristie.

LU STOUT: No call scheduled just yet. Mike Valerio, joining us live from Seoul. Thank you.

Let's talk about all of this with former Trump economic advisor Stephen Moore. Stephen, thank you so much for joining us. Now, let's get into --

STEPHEN MOORE, FORMER TRUMP ECONOMIC ADVISER, AND SR. VISITING FELLOW IN ECONOMICS, THE HERITAGE FOUNDATION: Thank you, Kristie. Thanks for having me.

LU STOUT: Let's talk about President Trump's thinking this week. Why did he reverse course and hit pause on reciprocal tariffs, apart from China, of course?

MOORE: Well, I think, first of all, it's been a turbulent week for the financial markets and for the economy, not just in the United States, but around the world. And I think Trump wants to get this thing resolved as quickly as possible.

He wants to get a deal done with all the major countries in the world. And by the way, there's nothing that Donald Trump is asking of the other countries that's unreasonable. He's just simply saying, you know, why don't you lower your tariffs to the levels that we have, or else we're going to raise ours.

He's starting to get calls from a lot of the countries in the world. And so I think this is on, you never know, but it looks like right now that things are proceeding pretty well. And hopefully we'll get deals done quickly.

And of course, China is in another category, though. China, we regard in the United States, China is an enemy, is an adversary, is a country that doesn't play by the rules and cheats. And so Donald Trump is going to be very tough with China.

LU STOUT: Yes, we're going to dig into China in a moment. But I wanted to ask you about the market for U.S. Treasury bonds, because when they started falling this week, it looked like America's financial system was getting pretty shaky. Is that spooking the U.S. president right now?

MOORE: Well, I mean, he cares about the stock market. He cares about American workers. He cares about the blue collar workers who helped elect him.

And by the way, people always ask me, well, why is Donald Trump doing this? And it's because he told the voters this is what he was going to do.

[03:10:04]

And he has the support of voters. In terms of getting very tough with other countries that don't give us a fair deal, as Trump would say, a lot of countries are ripping us off and that's going to come to an end.

LU STOUT: Yes, Trump has always been very transparent. He is the tariff man, after all. And going forward, he's Treasury Secretary.

MOORE: He said tariff was his favorite word.

LU STOUT: That's right. And going ahead, we got these negotiations coming up, right? We got this 90 day pause to allow these negotiations with some 70 governments.

And, you know, that's a very long list. So, you know, how feasible is this approach?

MOORE: Well, he's going to have every department of the government really all hands on deck where we make these deals. I don't think deals are really that complicated. It's basically just trying to get these other nations to reduce their tariffs that they unfairly impose on us so that when we sell goods to them, they're not charging us any more than we charge other countries when they bring in stuff in the United States.

And I think what's going to happen is there's going to be a lot of pressure over the course of the next few weeks and months for other countries to make these deals, as Trump said, you know, first at the table, get the best deals and the deals are probably going to get worse for those that are laggards.

And so the main thing is going to be the major European countries. What happens with Canada and other nations like that?

LU STOUT: And so there'll be talks during this pause for reciprocal tariffs for E.U. nations, for Canada, elsewhere, no pause for China and China showing no signs of backing down. Trump continues to jack up tariffs on China. What do you think is going to happen next in this standoff? MOORE: Well, listen, China really is in a different category. I think

those will be tougher negotiations. China really does impose very dramatic restrictions on our ability to sell goods to them, whereas they need access to America's market.

You know, China has taken a big hit in the last couple of months in terms of their economy, their stock market. It's really not doing well, let's put it like that.

And China can't really survive if they don't have access to the U.S. markets. Their economy will go into a Great Depression if they can't sell to the United States.

And that's the kind of trump card that Donald Trump is playing. He's using the leverage that America has over these countries like China to force them to make better deals with the U.S.

LU STOUT: OK, so this has been quite the week. You know, it's been a week of whiplash, of fear, of relief, of uncertainty, especially in regards to China. What has all this drama done to America's credibility and to the U.S. and also global economy? Your thoughts here.

MOORE: Well, look, Americans are worried, no question about it. I'm worried. I've lost money in the market.

And, you know, we have 180 million Americans who have their money in their market. They're poor on K plans, their retirement plans.

But I think most Americans are willing to give Donald Trump the benefit of the doubt. I mean, let's not forget, when he was president in his first term, we had the biggest boom market ever. The Nasdaq was up 150 percent, Dow Jones was up 60 percent and the S&P 500 was up 75 percent.

Those are pretty darn good returns. And I think most Americans realize this is a president who puts America first. He's a great negotiator, whether you like him or not.

He's, you know, he wrote the book, "The Art of the Deal." And so I think for now, Americans are rallying behind the president, although people are nervous. There's no question about it.

We'd like to see this get over, you know, get done as quickly as possible.

LU STOUT" Well, as his former economic advisor, Stephen Moore, you give us some exceptional insight into Trump's thinking. Thank you so much for joining us. Go catch your flight.

MOORE: Thank you.

LU STOUT: Now we are learning more about Thursday's deadly helicopter crash in New York's Hudson River. A law enforcement official says Siemens executive Agustin Escobar and his family were among the six people killed in this crash. Brynn Gingras is following the latest developments, but I've got to

warn you, some of the video in her report is difficult to watch.

(BEGIN VIDEOTAPE)

BRYNN GINGRAS, CNN U.S. NATIONAL CORRESPONDENT: Federal authorities, the FAA, the NTSB, now part of this investigation, trying to determine what caused that helicopter to go into the water. We know that there were a number of 911 calls into emergency officials describing how pieces of that helicopter were coming off of the body before it actually submerged into the water.

We also learned from the officials that the helicopter went into the water upside down, meaning that cabin was facing up, likely helping first responders get to those six people who were on board. But of course, no one survived this crash.

Six people on board, a pilot and a family of five who was visiting from Spain. Three of those people were children. What we understand is that they took off from a downtown heliport for a tourist ride along the Manhattan skyline, which is so common here, of course, in New York City.

[03:15:06]

They headed north, likely looking at the Statue of Liberty, coming north along the skyline to the George Washington Bridge and then turning back and following the New Jersey side of the Hudson River before crashing into the water. We believe that the helicopter was in the air for a total of 16 minutes.

Again, this investigation very much still underway with no answers as to what caused this crash.

Brynn Gingras, CNN, New York. Back to you.

(END VIDEOTAPE)

LU STOUT: Now former FAA safety inspector David Soucie spoke to CNN earlier. He examined videos of the crash and explains what might have gone wrong.

(BEGIN VIDEO CLIP)

DAVID SOUCIE, FORMER FAA SAFETY INSPECTOR: Almost 50 years now in this industry, I've never seen anything like this. That Bell 206 is the backbone of the helicopter industry.

It was used in Vietnam. It was used everywhere. This aircraft is like the John Deere of the skies, if you will.

But to see this happen is just heartbreaking to me.

But looking at it and doing some analysis on it, you can see that on the top, the rotors are no longer connected to the aircraft and the transmission, which drives those rotors, is also still connected to those.

So to me, that indicates only a couple of possibilities. It appears to me that there was a tail rotor strike. In other words, the main rotor, if you're doing an autorotation, for example, if the rotor speed gets low enough, then the rotors can droop.

And when that happens, if you put in the wrong kind of control into it can actually let the main rotor hit the tail rotor or the tail boom. And it appears to me that that's what happened here because that entire transmission came off and the tail rotors off in just a horrific way to go into the water this way. And I feel for all those who've lost people in this accident.

(END VIDEO CLIP)

LU STOUT: You're watching "CNN Newsroom." And up next, the U.S. Supreme Court orders the Trump administration to return a man mistakenly sent to an El Salvador prison. Well, sort of -- we'll explain the ruling.

And Director of National Intelligence Tulsi Gabbard swore under oath that she's a resident of the U.S. state of Texas. So why does she cast her 2024 presidential ballot in Hawaii? A CNN investigation coming up.

(COMMERCIAL BREAK)

[03:20:00]

(COMMERCIAL BREAK)

LU STOUT: Welcome back.

Now, in a ruling that one legal expert calls, quote, "maddeningly vague," the U.S. Supreme Court says the Trump administration must facilitate the return of a Maryland man wrongly deported to a notorious prison in El Salvador.

But the top court stopped short of requiring the government to make the return of Kumar Armando Abrego Garcia actually happen. Paula Reid explains.

(BEGIN VIDEOTAPE)

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: On Thursday, the Supreme Court released its much anticipated decision on a man who was accidentally deported to El Salvador.

Now, a lower court had ruled that the Trump administration must return this man to the United States. The administration appealed. And once this reached the Supreme Court, they had a few options.

And in their decision released late Thursday, they sort of took a middle road. They didn't order that the man has to be returned or that he does not have to be returned to the United States. Instead, they said that the administration must, quote, "facilitate his return," but didn't explain exactly what that means, nor did they give the administration a deadline.

It is expected that this case will now go back down to the lower court to clarify some points that the justices said needed to be fleshed out. So at this point, it's unclear how long this process will take to play out and when, if ever, this man will be returned to the United States.

And this decision comes after several wins for the Trump administration at the high court over the past few days, wins on cases dealing with immigration, but also with the administration's efforts to cull the federal government.

So we're still waiting for one big case from the Supreme Court right now, and that is a decision on the administration's effort to end so- called birthright citizenship. That's the last big question that justices have on their desks for now, but of course we're just a few months away from Supreme Court decision season.

Paula Reid, CNN, Washington.

(END VIDEOTAPE)

LU STOUT: Now the Trump administration is justifying its effort to deport the Palestinian activist Mahmoud Khalil. A newly released memo, it claims that Khalil is deportable because of beliefs, statements, or accusations, associations that would compromise U.S. foreign policy interests.

Now the memo, it's from the Secretary of State Marco Rubio, contains no allegations of criminal activity. Now Khalil is a prominent pro- Palestinian activist and a legal permanent U.S. resident, and he was taken into custody about one month ago.

Now questions are being raised about the U.S. Director of National Intelligence Tulsi Gabbard and where she voted in the 2024 presidential election. Months before casting her ballot in Hawaii, Gabbard and her husband declared under oath that they were residents of Texas.

Kyung Lah has a story.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN SR. INVESTIGATIVE CORRESPONDENT (voice-over): Months before Tulsi Gabbard was sworn in as a Director of National Intelligence in the midst of her transformation from independent to Trump supporter.

In March 2024, she bought a home in the politically red state of Texas. Soon after, the background on some of her frequent Fox News appearances changed from the slope of Oahu's Diamond Head Crater.

TULSI GABBARD, FORMER DNC VICE-CHAIRMAN: You see them out pushing the so-called woke agenda.

LAH (voice-over): To a view of the Texas state capitol. GABBARD: This is personal for me, this endorsement of President Trump.

LAH (voice-over): A CNN investigation found that Gabbard declared herself a Texas resident, but voted in Hawaii in the presidential election last November. Experts say that raises questions about whether she voted improperly.

GABBARD: Voter integrity is a serious concern and a serious issue.

LAH (voice-over): On the campaign trail for Donald Trump last year, Gabbard talked about election security on stage.

[03:25:02]

GABBARD: We need to be able to have trust and confidence in the fact that when we cast our vote, that our ballot will be counted in the way that we have cast it.

LAH: It's where Gabbard cast her ballot that's the issue here. Gabbard rents a home in Hawaii. She's lived in Aloha State for many years.

In March 2024, Gabbard bought a home in a suburb of Austin, Texas. In June 2024, she and her husband declared under oath that we are residents of the state of Texas.

And their Texas home was designated as the family homestead. And she also claimed a homestead tax exemption on the house.

But in the 2024 general election, Gabbard cast her ballot in Hawaii. And that's potentially a problem.

Under Hawaiian election rules, an individual can only have one residence for voting purposes. And if the voter has more than one home, there is a presumption that the property that gets the tax exemption is the person's residence. And remember, Gabbard designated her Texas home as a family homestead months before the general election.

What is the problem here?

JUSTIN LEVITT, PROF., LOYOLA LAW SCHOOL: The problem appears to be that Ms. Gabbard is claiming that she's a resident of Hawaii, that she is eligible to vote on Hawaii races in Hawaii because that's where she lives. And she's also at the same time claiming that she's a resident of Texas.

LAH (voice-over): Gabbard's office tells CNN that she took the Texas homestead exemption as a first step to hiding her address because of security concerns. In a letter to CNN, her attorney said, "Director Gabbard was, is and intends to remain a Hawaii resident. That is where she lives, pays taxes and of course votes. Any suggestion that she is no longer a resident because she took the advice of local officials to register at a homestead exemption to protect her and her family's privacy is flat wrong, factually and legally."

LEVITT: Sometimes there are these disconnects between where you're laying your head most of the time and where you're registered to vote. But it's very different to claim a tax exemption on a primary residence. That's an indication that that's where you really live and therefore that's where you should be registered.

LAH: So what's the bottom line here for Gabbard?

Well, we spoke with a Hawaiian election lawyer who's handled multiple election residency cases. And he says, theoretically, she could face a challenge to her Hawaiian voter registration. But someone would have to file that challenge with Hawaii officials.

Kyung Lah, CNN, Los Angeles.

(END VIDEOTAPE)

LU STOUT: You're watching "CNN Newsroom." And still ahead, U.S. inflation appears to be slowing, but will it last amid this global tariff crisis? We got more on that next.

(COMMERCIAL BREAK)

[03:30:00]

(COMMERCIAL BREAK)

LU STOUT: Welcome back to "CNN Newsroom." I'm Kristie Lu Stout. Let's check today's top stories.

Now authorities in New York are investigating a deadly helicopter crash in the Hudson River on Thursday. Six people were killed, including three children, all members of a family visiting from Spain. Now, the helicopter sightseeing tour flew them by the Statue of Liberty and the George Washington Bridge before crashing near New Jersey.

Authorities in the Dominican Republic have ended the search for survivors or more bodies, but the search continues for the cause of the roof collapse at a popular nightclub that killed 225 and injured at least 189 others in this disaster early on Tuesday.

Now the White House says U.S. tariffs on Chinese goods are now at least 145 percent. Now, President Donald Trump met with his cabinet on Thursday as administration officials said that China will have to make the first move to resolve the growing trade war.

U.S. Democrats are calling for an investigation into potential insider trading connected to President Trump's tariff pause. Two Democratic senators have sent a letter to officials, including the government ethics head. They are requesting an urgent inquiry into whether the president, his family, or members of his administration are committing insider trading based on advanced non-public knowledge of changes in Mr. Trump's tariff policy.

Now here's Senator Adam Schiff speaking with CNN's Erin Burnett.

(BEGIN VIDEO CLIP) ERIN BURNETT, CNN ANCHOR: So, you know, if you don't get, obviously, Trump's SEC chief to investigate, and it would be a Securities and Exchange Commission investigation, you don't have the attorney general, Pam Bondi, investigate, right?

If it doesn't come from there, and it doesn't come from Republicans in Congress, who control it, and therefore launch an investigation at the committee level, is it dead? I mean, does nobody do anything?

SEN. ADAM SCHIFF (D-CA): No, it isn't dead. And what we found during the first Trump administration is, even in the minority, we can hold shadow hearings as we did, and as I did just earlier this week, with witnesses who come forward.

Sometimes they're whistleblowers, and other times they're people who are just willing to speak out when they see acts of corruption. So we may have whistleblowers who come forward. We may have others that are aware of potential stock transactions that give information that we can follow up on.

Eventually, the truth is going to come out. You just can't hide something like this. Obviously, the press plays a vital role also in uncovering wrongdoing.

But we will get to the bottom of this one way or another. I'm confident we'll get answers. But right now, there's such a sense of impunity in the White House, that if it's not the President trading his own meme coin, or the President's kids with their cryptocurrency, or this reckless handling of the tariffs, it is an environment in which you have to expect that corruption is likely.

(END VIDEO CLIP)

LU STOUT: Adam Schiff there.

Okay, some good news for a change. New data is now showing inflation slowing sharply in the month of March. At any other time, this would offer optimism that the cost of living in the U.S. is no longer climbing.

But CNN's Matt Egan says, don't get too excited.

[03:35:01]

(BEGIN VIDEOTAPE)

MATT EGAN, CNN REPORTER: This was a nice surprise on the cost of living, which of course is a major issue, better than expected inflation report for the month of March.

Unfortunately, economists are worried it's not going to last long because of the trade war. I'll get back to that.

First, let me run you through the numbers. Consumer prices, they dipped by 0.1 percent between February and March. That's the first time we've seen a monthly drop in prices since 2020. And the annual inflation rate cooled more than expected to 2.4

percent. That's a six month low.

So why did this happen?

Well, one factor was energy, specifically gasoline prices fell sharply. Of course, that happened for good reasons and bad reasons, right? Part of that is about more supply of oil from the United States and notably from OPEC. It's also because of concerns about lower demand, right? Recession fears have caused a plunge in the price of oil and that has driven gasoline prices down.

As far as some of the other items that got cheaper, some economists that I've talked to were concerned about the fact that we saw a significant drop in prices for hotels and for airfare. That speaks to a slowdown in travel and suggests that given all the uncertainty right now, some people are deciding that a staycation does not sound so bad.

One place we were hoping to see some relief, but we did not, is in the grocery store aisle, specifically eggs. We've seen wholesale egg prices come down, but that is not translated to consumers yet.

Egg prices increased by another six percent month over month. That takes the cost of an average dozen of eggs up to $6.23. That is an all-time high.

Look, the bottom line is outside of eggs, this was a good report, but it's a snapshot in time. It reflects prices in March and we know the trade war has only gotten much worse since then.

In fact, the budget lab at Yale put out new estimates where they're estimating that the cost of these tariffs to the typical middle-class family is going to be $3400 per year.

And so that is why some economists, they worry that this progress on the inflation front could not only stall out, but actually unwind in the coming months, all because of tariffs. Back to you.

(END VIDEOTAPE)

LU STOUT: Okay, a major win for Republican leadership after it subdued a rebellion among its members. The U.S. House approved a Senate budget plan on Thursday in a critical step forward for President Trump's agenda, but the plan advanced only after conservative holdouts were assured that the final bill would include $1.5 trillion in spending cuts.

Now the move caps a dramatic week for the House Speaker. He was forced to cancel plans for a vote earlier after nearly 20 Republicans demanded a guarantee of steep spending cuts.

(BEGIN VIDEO CLIP)

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: And if it comes back with a reconciliation bill less than 1.5 trillion?

REP. RICH MCCORMICK (R-GA): It's not going to get done. I promise you, you'll have not just me, you'll have 30 people that won't vote for it.

RAJU: But you'll vote against anything that comes back on a reconciliation bill under 1.5 trillion.

REP. ANDY OGLES (R-TN): That's right. We've got to hit that target. That's, again, this is why President Trump won.

We've 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?

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.

(END VIDEO CLIP)

LU STOUT: Now a Russian-American woman convicted of treason in her homeland is back in the U.S. after being released in a prisoner exchange with Moscow. Ksenia Karelina arrived at Joint Base Andrews near Washington late on Thursday to hugs and flowers, and she had been serving a 12-year prison sentence in a Russian prison for making a small donation to a charity supporting Ukraine.

Fred Pleitgen has more.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN SR, INTERNATIONAL CORRESPONDENT (voice-over0: 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.

[03:39:58]

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 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 Boehler.

She's the second American freed by the Trump administration after teacher Mark Fogel was released by the Kremlin in February.

MARC FOGEL, AMERICAN DETAINED FOR MORE 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 DIMITRIEV, SR. 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 endgame can be.

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)

LU STOUT: You're watching "CNN Newsroom." And still ahead, Ecuador is locked in a tight presidential runoff and issue number one is the surge in drug violence. We got the details after the break.

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[03:45:00]

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LU STOUT: Welcome back.

Now, there are questions about a new mishap at Washington, D.C.'s Reagan National Airport. Two passenger planes bumped wings there on Thursday. Seven members of Congress were on board one of the planes.

A U.S. House Republican, Nick LaLota, posted this photo on social media showing the plane's wing. The FAA says it's investigating.

Now this comes as the airport copes with a series of recent incidents, among them a midair collision in January that left 67 dead and a military flyover that came dangerously close to a departing plane.

Now voters in Ecuador go back to the polls on Sunday for the presidential runoff election. And the two candidates vying for the top job are focused on security, especially in coastal provinces struggling with rampant drug violence, which has made Ecuador the murder capital of South America.

David Culver has a story and a warning, some of the images in this report may be disturbing.

(BEGIN VIDEOTAPE)

DAVID CULVER, CNN SR. NATIONAL CORRESPONDENT (voice-over): Ecuador, once considered the island of peace, has now succumbed to a surge of violence.

Police and military are trying to fight back. Raids like this, almost daily. Desperate, they go house by house.

CULVER: You can see in his hand right there, that's 200 grams, according to police, of cocaine that they've seized. That's what he's pulling out right now. He said they also found two different explosive devices inside.

CULVER (voice-over): Sandwiched between Colombia and Peru, both top cocaine producers, Ecuador has become caught up in the international drug trade. And where there are gangs and illicit drugs, violence follows, leaving a trail of victims.

CULVER: Oh, my gosh. The smell is overwhelming as he's opened this door here, but from the outside looking in, you can see there's blood on the ground.

CULVER (voice-over): Another killing, another crime scene. This is now the murder capital of Latin America. This is Ecuador 2025.

Ecuadorians are now heading back to the polls in what is expected to be a tight runoff race for president. The number one issue for voters? No question, security.

Current president Daniel Noboa, defending his nearly 17-months in power, declaring war against gangs, labeling them as terror groups, and deploying the military into the streets early last year.

After an infamous gang leader escaped prison and gunmen stormed a T.V. station, taking journalists hostage live on air, the country spiraled into chaos.

Noboa's initial push to tackle crime at first showed promise, but the violence has resurfaced. More than 2500 killings reported already this year.

But Noboa isn't going at it alone. He's counting on a powerful ally in this man.

TRUMP: Today, we will also be designating the cartels as foreign terrorist organizations.

CULVER (voice-over): Applauding President Donald Trump's inauguration day pledge to combat organized crime, Noboa and his wife front-and- center as Trump took the oath of office in January.

As violence escalates and the economy stumbles, Novoa faces a strong challenge from left-wing candidate Luisa Gonzalez.

She's promising to boost the economy and crack down on crime while pumping more money into coastal cities where violence hits hardest.

But for many in areas overrun by gangs, it's already too late. The peace that once defined this coastal nation has shattered. Grief stretches across communities, once seen as safe havens, today scarred by constant violence.

Folks here whisper it to us like a memory, repeat it like a prayer. Ecuador, they say, was never like this before.

David Culver, CNN, Guayaquil, Ecuador.

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LU STOUT: You're watching "CNN Newsroom." And up next, golf's first major season, major of the season, is underway with round two set to tee off in a few hours. Roy McIlroy has a fight on his hands to finally earn a career grand slam. We'll explain properly ahead.

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[03:50:00]

LU STOUT: OK, now to Australia, where a teenage sprinter broke the 10- second barrier in the 100 meters, not once, but twice in the same day. 17-year-old Gout Gout clocked a stunning 9.99 seconds in the 100 meter heat at the Australian Athletics Championships in Perth on Thursday.

And then he recorded the same time in the final. However, neither time will count as his official personal best, as both were assisted by illegally high tailwinds.

Now the teenager is already drawing comparisons with legendary sprinter Usain Bolt, and he will be back at the same track to race in the men's 200 meters event on Sunday.

Now, the hunt for the coveted green jacket has teed off, with American Justin Rose grabbing a three-stroke lead at The Masters. Three golfers, including defending champ Scottie Scheffler, are bunched up in second place, and Roy McIlroy is seven shots back at the first major of the season. Now, CNN Sports Don Riddell is at the legendary Augusta National

Course.

(BEGIN VIDEOTAPE)

DON RIDDELL, CNN WORLD SPORT 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's 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.

[03:55:00]

JUSTIN ROSE, FIRST ROUND LEADER AT -7: 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, TWO-TIME MASTERS CHAMPION: I would have felt pretty good about it. I had a feeling the golf course was going to get pretty firm, and 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'll 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 a simple fact of the matter.

You're going to have 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 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.

(END VIDEOTAPE)

LU STOUT: Hey, thank you for joining me. I'm Kristie Lu Stout in Hong Kong. "Early Start" with Polo Sandoval is next.

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