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CNN International: Mahmoud Khalil "Removable" From U.S.; Beijing Says Latest Tariff Hike Will Be Its Last; China Raises Retaliatory Tariffs To 125 Percent; Xi To Visit Southeast Asia; Potential Tariff Impact On Cambodia; Investigation Into Helicopter Crash; Putin meets With Witkoff In Russia; China Taking On Tesla; San Antonio, Texas Braces For Tariff Impact. Aired 6-7p ET

Aired April 11, 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 ANCHOR, QUEST MEANS BUSINESS: Hello and welcome to you all. Very good evening, good morning, wherever you are joining me in your time zone. I'm Richard Quest. I'm in for Jim Sciutto today.

Ahead, as we went our way through the hour, an immigration judge has ruled Columbia University's graduate Mahmoud Khalil is removable from the United States. The Trump administration has offered up a two-page memo against him. Khalil's wife is calling it a devastating bloke.

As President Trump's trade war takes aim at China, President Xi is planning a tour of Southeast Asia. We'll hear from Cambodia, one of the president's stops.

And Chinese electric vehicle maker BYD gains major ground on Tesla. This is despite having zero presence in the United States. We'll talk about that. There's so much more. We have an hour together.

A U.S. immigration judge in Louisiana has decided Mahmoud Khalil can be deported from the U.S. The Palestinian activist and former Columbia University graduate student was detained by immigration authorities last month. He is currently being held in Louisiana, although his exact whereabouts are not known.

The government's argument relied on part of the U.S. Immigration Code, which says the U.S. can deport a non-citizen whose presence or activities is determined to have potentially serious adverse foreign policy consequences for the United States. We should note this wasn't a ruling on whether Khalil will be deported. That case is going to be taking place in a case in New Jersey. In any event, his wife has called the latest decision devastating.

Gloria, as with me, Gloria Pazmino. So, how did this judge come to the decision that he -- that Khalil was deportable?

GLORIA PAZMINO, CNN CORRESPONDENT: You know, Richard, it's sort of like a fascinating jurisdictional battle that is playing out here between Louisiana, the federal government there, and the immigration court where Khalil has been detained for the past month. Now, the judge in Louisiana, who held a hearing today, said that based on this foreign policy charge, she found that Mahmoud Khalil should be removed from the United States based on that foreign policy ground, the policy that you talked about there at the introduction. That's important to highlight because she is relying on that determination to say, yes, he should be removed.

However, it is important to highlight here that that doesn't mean he's going to get deported anytime soon because his attorneys are trying to continue to fight this case. They want to appeal. There is an appeal process that is expected to play out here. They will appeal that decision. And so, it's unlikely that he is going to get deported anytime soon. But while this plays out, he continues to be detained.

Now, it's important to remember, he has not been accused of any crime. He hasn't been accused of any sort of violent activity. We have not seen evidence that he's some sort of threat to the national security. So, that is where the case in New Jersey comes in, and that's where his lawyers are hoping that they can make an appeal, make their case to this other judge in New Jersey to see if he can be let out.

QUEST: Right. Now, let's stay with -- for the second, let's just stay in Louisiana. The problem in Louisiana is he doesn't have to have been convicted of anything, he doesn't have to have actually had anything against him that would be traditional evidence, it's merely got to be that in the view of the U.S. secretary of state, he is adverse to the foreign policy interests of the country as the secretary of state determines it.

PAZMINO: That's exactly right, and that's where the jurisdictional battle comes in and why the details here are so important because this immigration judge in Louisiana, her name is Jamie Coleman, she said earlier today that essentially that her hands were tied, that based on the memo, she needed to make this determination. And so, that's exactly what's happened here.

Now, again, his attorneys have to figure out how they're going to appeal that decision. And there's a little bit of -- there's a very clear legal strategy that's emerging by both sides. The government is trying to delay as much as possible. They want to continue to delay the process because it means that the case in New Jersey cannot be heard.

[18:05:00]

It means that those motions cannot be considered, and it means that the case will continue to be stuck in immigration court, which moves slowly, is incredibly hard to access and just doesn't function like the state and civil criminal courts that we are used to at the -- sort of, at the state level. So, that's another complicating factor.

QUEST: Gloria, I'm grateful. Thank you very much. Before we go to our next guest, I do just want to correct something that we do -- that I need to correct, we do know where Khalil is. I was confusing it momentarily with, of course, the next case that we're going to be talking about. But we do know where Khalil is because, of course, he actually addressed the court. So, just to clarify that for you.

Donna Lieberman is the head of the New York Civil Liberties Union with me now. Well, now, we are in a bit of a legal morass here because the judge in Louisiana says, I don't have any -- I mean, I -- you know, we got the document properly signed and sealed by the right person, made the determination. That's all I can do.

But in New Jersey, we're talking about habeas, in New Jersey. What happens where we get this jurisdictional disagreement between the two courts who wins?

DONNA LIEBERMAN, EXECUTIVE DIRECTOR, NYCLU: Well, we hope that Mr. Khalil wins eventually. The court in New Jersey is ruling on, is being asked to find that the statute is unconstitutional because it violates the First Amendment guarantee of free speech. All we have here is NAA effort to deport, to revoke his status as a green card holder, as a legal permanent resident based on his exercise of free speech, based on his opinions.

The First Amendment protects everybody in this country, including students with visas, including legal, permanent residence like Mr. Khalil. So, the statute is either unconstitutional on its face or as applied to this activity.

QUEST: So --

LIEBERMAN: And -- go ahead.

QUEST: -- it has -- so, there has been cases of this before, you know, in the 1980s, the LA 8 is a famous case that where -- this was -- went through. So, it's not -- so, this is not a novel argument in terms of the First Amendment versus the act. But why do you think you're going to win on this particular point now?

LIEBERMAN: This statute has never been applied to somebody who is not a high-level government official of a foreign country. He is a recent graduate of Columbia University and he's being accused of having a substantially harmful effect on foreign policy. The accusation is ridiculous to start with. But this is all about his disagreement with the Trump administration.

QUEST: Right.

LIEBERMAN: And there's something fundamental about the First Amendment. There's something fundamental. You know, you can't be arrested, you can't be deported for having the wrong ideas. Democracy is about different ideas.

QUEST: How important is it, and this is something that the -- that I think the rest of the world is learning now even more so. How important is it, at least that you get the right judge, judge shopping to an extent, in the first instant? Obviously, as you go up through the appellate courts and then onto the Supreme Court it -- you know, well, we know as the Supreme Court that -- but how important is it to get the right judge initially? LIEBERMAN: Well, it -- I think that the government was pretty clear that it wanted to get Mahmoud Khalil out of New York City, out of New Jersey and into friendlier territory. That's why they spirited him off in the middle of the night to Louisiana. We believe that he'll get a fairer hearing in New Jersey, which was where he was detained when the writ was filed.

It's important that the judge in New Jersey issued an order to the government telling them they cannot deport him while the case is pending. And that's important. He's not free. And we have made a bail application and we're hopeful that he will be freed in time to be home with his wife for the birth of their first child. But he cannot be deported until the habeas corpus petition.

This is the classic kind of case that we bring in our country when a person is unlawfully detained, a writ of habeas corpus.

QUEST: Which, of course, goes back centuries, show me the body, where is the body. Thank you, ma'am. I'm grateful for you for joining us. Thank you.

LIEBERMAN: Thanks for having me.

[18:10:00]

QUEST: Now, a U.S. judge shared her frustration as the Trump administration failed to comply with the court order. Now, this is the case that related to (ph) the guy who has sent to El Salvador into that mega-prison.

At a hearing in Maryland, the judge said it's extremely troubling the government won't identify the whereabouts of Kilmar Abrego Garcia. The Supreme Court, you remember on Thursday, said that the judge's order had to facilitate Garcia's return. Here's a word down from the man's lawyer.

(BEGIN VIDEO CLIP)

SIMON SANDOVAL-MOSHENBERG, ATTORNEY FOR KILMAR ABREGO GARCIA: The government refused to provide any of those pieces of information that the judge ordered them to provide. Not only the information about what future steps they're planning to take, they even refused to answer the question about what they've done so far. And they even refused to answer the question about where Kilmar Abrego Garcia is today.

(END VIDEO CLIP)

QUEST: The government failed to meet the deadline to provide the information and its justification said, foreign affairs cannot operate on judicial timelines. El Salvador's president is expected to visit the White House on Monday to discuss the country's use of mega- prisons.

Tariffs now, and China's latest tariff retaliation and hopes the two side might be willing to dial back their trade war. On Friday, China raised tariffs on U.S. goods to 125 percent. It took effect this weekend. It's below the 145, you see on your screen, that the U.S. had already slapped on.

But I think most importantly, Beijing is saying this will be the last hike, because in their words, at the current tariff level, there is no market acceptance for U.S. goods exported to China. It means, in essence, higher tariffs at these levels are meaningless. The damage is done, which is something that Karoline Leavitt was asked about today at the White House.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Beijing says it will simply ignore any further tariff escalations from the U.S. Does President Trump see this as China backing down? And as a follow up to that, what do you say to people like "Shark Tank's" Kevin O'Leary who say, you guys simply haven't tariffed China enough?

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: Look, the tariff rate on China remains where it was yesterday, at the 145 percent level. The president made it very clear when the United States is punched, he will punch back harder. And he hopes to make a deal that benefits the American worker and our companies that have been ripped off for far too long.

(END VIDEO CLIP)

QUEST: What is significant is that the U.S. did not retaliate immediately. Larry Sabato is with me, the founder and director of the University of Virginia's Center for Politics. So, it's almost as if the Chinese telegraphed, enough is enough. We've done this. We're not doing more. We've told you we're not doing more. Claim your pyrrhic victory if you want to, by saying they're not doing more, but now it's time to talk. Do you think -- do you see it like that?

LARRY SABATO, CENTER FOR POLITICS DIRECTOR, UNIVERSITY OF VIRGINIA: Well, I do. I think it's interesting that apparently the Chinese have not called, and I think Trump expected them to call. He thought that they would at least go that far and take the first step. They haven't. They seem to be hunkering down, and maybe they've made the calculation that they can survive this a lot longer than the United States can. And that may surprise people, but you need to remember that the People's Republic of China is not a democracy, and we are, at least the last time I checked this morning, you have to check each day under the Trump administration to see whether the rule of law still matters.

But in a democracy, presidents -- even presidents who think they're above it all have to be subject to public opinion because their fellow party members in Congress and other places are worried already about the midterm elections.

QUEST: So, we have China now essentially there's going to be, unless you actually need to buy from China, and I mean need with a capital N, you're not going to do it and you're going to substitute out. You've got this 150 to -- or 75 trade negotiations in 90 days. The markets seem to just be saying, we're holding our breath, but we are going to wait and see. Is that a fair assessment of the week? SABATO: I think that's a very fair assessment. And I have to say, the people I respect don't think it's possible to work out 75 deals in 90 days. And that doesn't include the one with China, of course. So, this is really scary territory. And too many experts, many of them Trump supporters, clearly having voted for Trump, believe we are on our way to recession or already in one.

QUEST: And that's consumer number that we saw. The consumer sentiments of the survey, the Michigan survey this morning. It's anecdotal and it's as, you know, soft data, but the low level, the lowest since I think 1952 or something, that's worrying because I think the stats show at these extreme levels it does turn into a self-fulfilling prophecy when the hard data comes in.

[18:15:00]

SABATO: That's what many people who really understand the economic system here have said, it's self-fulfilling. And really, I know you're saying it's soft data and other people have said that, but frankly, the record is as old as I am. I was born in 1952, and that's pretty shocking that we go all the way back to '52 for that. And that ought to send a message to people in Washington and the White House.

QUEST: You've got 10 years on me. I'm 62, but I think both are vintage, which means we've probably earned our rights to sit where we are. Good to see you, Larry, and have a lovely weekend. Thank you.

SABATO: Thank you, Richard. ' QUEST: Now, Wall Street ended a tumultuous week with solid gains. All the major indices at more than one and a half. We're just talking there. You can see the numbers. Somewhat meaningless in a sense because of the volatility during the week.

It was tariff deals that was moving at all. And the Boston Fed president told the F.T. the officials are absolutely ready to stabilize the markets if they have to. Now, that might sound like a somewhat statement of the bleed and obvious, but it was the sort of oil that calmed the waters.

And the S&P 500 has risen more than 5 percent over the week. It's the best gain in more than a year, on the brink of a bear market before the 90-day pause. In the bond market, we've been looking at that ever so closely. Yields saw their biggest rise since 2001. The tariff delay was given. Mortgage rates are rising above 7 percent on Friday, that's on the 30-year. Massive moves in currencies. The dollar index falling 3 percent. You rarely (INAUDIBLE) this moves by decimal dots as opposed to large numbers like this.

So, as we put it all together, Southeast Asia nation Cambodia is finding itself right in the spotlight of the global trade war. We were talking to a representative that in just a moment.

(COMMERCIAL BREAK)

QUEST: Next week, President Xi Jinping is going at traveling. He's got a Southeast Asia tour. According to Beijing, he is going to Cambodia, Vietnam, and Malaysia in his first foreign trip of the year. It was all put together all the fast. The announcement comes after the U.S. hit China with a tariff of 145 percent. Now, President Trump has hit pause on reciprocal tariffs. 49 percent was the number for Cambodia, 46 percent for Vietnam, 24 percent on Malaysia.

[18:20:00]

So, now, let's talk about Cambodia, the second highest in Asia after China. USTR has listed Cambodia's non-tariff trade barriers. These are the things that U.S. desperately wants to get rid of if it's going to open up the market. Apparently, it's things like government procurement, lack of transparency, and how the government makes its decisions, counterfeit and pirated goods are common, thereby hitting U.S. genuine goods. The country restricts foreign ownership of land. It's a big one in that part of the world. And corruption is a major obstacle to investment.

So, with me, Casey Barnett, president of the American Chamber of Commerce in Cambodia to discuss this. When the negotiations get underway, as we probably are already, the U.S. and the 24 percent or whatever the number is, I mean, that's a headline number, but that can always be whittled away, but it's the non-tariff that they want to get rid of, the list I've spoken about and more. Is that where the battle's going to be?

CASEY BARNETT, PRESIDENT, AMERICAN CHAMBER OF COMMERCE IN CAMBODIA: Cambodia is ready to remove these barriers. And in fact, Cambodia is a very American friendly place to do business. Cambodia allows 100 percent American ownership of any kind of business, including telecommunication, banks.

If we compare with other countries in the region, such as Indonesia or India that have much lower reciprocal tariffs, those countries limit American ownership of banks and involvement insurance, and even retail business in India. So, Cambodia is one of the most American friendly nations in the region, even using the U.S. dollar as the functional currency.

So, I believe --

QUEST: So, what do you think they're going to offer up then? Because what -- you know, in terms of -- again, the nominal rate is somewhat irrelevant at one level, but when you get to these sort of trade talks, what do you think the sticking point from your member's point of view, you know the sticking points of U.S.-Cambodia trade, what is it?

BARNETT: The -- there is absolutely no interest in the U.S. raising tariffs on Cambodia. Cambodia industry does not compete at all with American industry. Cambodia produces low-cost garments, travel goods, and footwear that don't compete with American industry. And these goods are produced -- Cambodia produces as a low-cost provider. And typically, the retail prices for American consumers are lower. And a tariff on these goods is really going to hurt American working-class families. The non-tariff barriers, really, are not going to be difficult for Cambodia to overcome. You mentioned recently about the prohibition of land ownership. Cambodia has already resolved that. They've introduced a trust arrangement where Americans can own property through trust.

So, they're very welcoming. They're flexible. They've communicated. Cambodia's communicated cooperation through a letter to the U.S. trade representative offering to reduce tariffs on goods. And Cambodia is also welcoming U.S. agricultural products.

QUEST: Right. Right. But I looked at the -- but, you know, that, that's all fair enough. But I looked at the USDR report on foreign tariff barriers. And the fact that Cambodia had pre-pausing, if you know what I mean. So, pre-pausing. Cambodia had a rate that was higher than the standard 10 percent that countries like Australia, the U.K. and others got, suggests that the -- and we know from what the president said that the U.S. does have a problem in certain aspects with Cambodia.

And I guess what I'm sort of trying to understand as we come to an end here, is what do you think they can offer up that will appease the administration? Because the administration clearly wants something.

BARNETT: Well, let's understand why that rate of 49 percent was imposed. It's simply due to the trade surplus that Cambodia has with the United States. And there is -- Cambodia has per capita income of $2,900. Cambodian simply can't afford many American produced goods. And that's why there's a trade surplus.

Now, there is American -- there is Cambodian consumption and use of American digital services. There's potential demand for agricultural products. The Cambodian banking sector runs on Oracle software. American technology is running about 89 percent of Cambodian businesses. And really, Cambodia's a friend of the United States. The Cambodian diaspora is here in the United States.

[18:25:00]

And U.S. really holds the cards when it comes to Cambodia. And to impose tariffs would really push Cambodia into China arms.

QUEST: Into China's arms, of course, which is what we're going to see even further next week. And I'm sure that's -- I'm sure that will not be lost in the discussions ahead. I'm grateful to you, sir. Thank you very much for joining us tonight. And we'll talk --

BARNETT: Thank you.

QUEST: And certainly, we'll talk more once we get more details. Now, it -- as we continue tonight, the U.S. transportation safety officials are giving an update on the investigation into the helicopter crash. Just horrific. Just awful, awful. Six people died, as you know. And we'll tell you what the latest thinking is on what caused that crash.

(COMMERCIAL BREAK) QUEST: You are most welcome. You're in the CNN Newsroom. I'm Richard Quest. We end the week and start the weekend together. And we do so with the international headlines because this is CNN, and here the news always comes first.

Iran and the United States are set to begin critical nuclear talk in Oman on Saturday. Iran's message to Washington, no threatening language or excessive demands. The meeting could be the first direct talks between the two officials sides in a decade.

The Trump administration has removed the commander of the military base in Greenland. It follows the visit by Vice President J. D. Vance last month. Colonel Susannah Meyers sent an internal e-mail criticizing the vice president's visit. (INAUDIBLE) said she was removed because of, in their words, a lack of confidence in her ability to lead.

Two people were killed when a small plane crashed on a busy street near a Boca Raton Airport in Florida. The plane made several loops before going down, investigating -- assigning possible mechanical failure. And of course, the FAA is investigating.

[18:30:00]

Investigators are seeking answers, of course, after the sightseeing helicopter crashed into New York's Hudson River on Thursday. Six people, which involved Siemens executive, his wife and their family, the three children and the pilot, they were all killed. Officials say they're looking into what took place, of course, and that involves the pilot, the owner, and the company, as well as the helicopter itself.

(BEGIN VIDEO CLIP)

JENNIFER HOMENDY, CHAIR, NATIONAL TRANSPORTATION SAFETY BOARD: We have a lot of information, but we do not speculate. We need to confirm information. That is a process that takes time.

(END VIDEO CLIP)

QUEST: Mary's with me. Mary, when I hear them saying, we have a lot of information, but we do not speculate, I assume they've got a pretty good idea. Maybe not what actually caused it, but the sequence of events as how they happened.

MARY SCHIAVO, CNN TRANSPORTATION ANALYST: I think that's right. And they -- she also did indicate that they had been grabbing records, which is what they do in every investigation, but they had records concerning the oversight of the operation, of the maintenance of the plane, of the -- or the helicopter, the ownership of the helicopter.

And, you know, this is not the NTSB's first rodeo up there at the Hudson River. There had been many accidents, many fatalities, and they have outstanding recommendations concerning operations over the Hudson River by helicopters that the FAA has not acted on.

So, it looked to me -- now, this is my opinion, but it looked to me that NTSB has come to this investigation loaded for bear. They're going to try to get these changes, lifesaving changes that should have been made on this investigation.

QUEST: Tragically. I mean, it's a family -- Siemens executives from Spain on holiday in New York. I mean, what more can one say, I mean, awful.

SCHIAVO: Right. Yes. I mean, just terrible.

QUEST: The helicopters over the Hudson, it's too simplistic for me to ask you, Mary, are they safe or are they dangerous? Because as -- you know, it's -- anything safe and anything's dangerous in the right circumstances.

SCHIAVO: Right.

QUEST: And so, this begs the question, what do you think of the way these helicopters have been operating, both crossing out to visit to airports and, of course, with tourists?

SCHIAVO: Well, I've worked the Hudson Midair -- the river -- the midair over the Hudson back in 2009. And there, there was a combination of fixed-wing helicopters, and there was some increase in regulation after that, but not the main increase in regulation. These helicopter air tours over the Hudson River still operate under what's called Part 91.

Now, in FAA parlance, that means they operate at a lower level of safety than commercial passenger service. And the NTSB pointed that out today. They said, look, you know, is it safe or is it less safe or more safe? Well, the NTSB was pretty clear today. They said the NTSB -- things that operating under Part 91 over the Hudson River and helicopters is not safe. It's not proper.

So, yes, we can actually say it's less safe than other commercial air operations and it doesn't need to be. And that, in part, might account for why -- I think it's 38 people have died in these air tour operations since 1977. It doesn't seem like a lot until you consider, you know, there are very few operators there.

QUEST: Mary, I'm grateful to you. Thank you so much. Have a good weekend. Thank you.

SCHIAVO: Thank you. Thank you.

QUEST: Now, a big meeting just concluded in Russia a short time ago. One of President Trump's top enjoy, Steve Witkoff, who seems to be the envoy du jour for all seasons, has been meeting President Putin. They've been shaking hands. What's on the agenda? CNN's Fred Pleitgen.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Friday's meeting between President Trump's special envoy, Steve Witkoff, and Russian President Vladimir Putin in St. Petersburg, Russia was the third meeting of the two men. And the Russians are saying that the meeting between these two lasted more than four hours. And they say that there were essentially two main topics that were discussed.

One of them was, of course, the war in Ukraine and the possible ending of the conflict in Ukraine. Of course, that is something that is proving to be quite difficult. But the Russians are also saying that apparently a possible normalization in relations between Russia and the United States is also something that would be on the agenda for these talks.

Now, all of this comes as a ceasefire in Ukraine remains very difficult to come by and it certainly appears as though President Trump's frustration appears to be growing. He posted on his Truth Social account that he thinks Russia needs to get moving, as he put it, that people are dying. He wrote that in capital letters. And saying that thousands were dying each week.

[18:35:00]

So, clearly, the Trump administration believes that the Russians need to move forward and get a ceasefire going. Of course, we do know that about a month ago, the Ukrainians actually unconditionally said they would agree to as ceasefire with Russia. So far, however, the Russians are saying that they want the root causes of the conflict in Ukraine to be dealt with before as ceasefire can be put in place.

All of this as generally progress remains very difficult to come by, as far as possible ending of fighting in Ukraine is concerned. Right now, what is in place is a determination by both the Ukrainians and Russians not to hit certain targets, including energy infrastructure. However, for instance, a different agreement to end fighting in the Black Sea and allow for agricultural exports via the Black Sea, that is so far not in place yet because the Russians are saying that they want substantial sanctions relief before that can happen.

It's unclear how much was achieved in this latest round of talks between Steve Witkoff and the Russian president. However, the head of the Russian Direct Investment Fund, Kirill Dmitriev, who's also one of the top negotiator for the Russians, he called the meeting productive.

Fred Pleitgen, CNN Berlin.

(END VIDEOTAPE)

QUEST: And I am grateful and most grateful that you are with us this evening, this morning. And the U.S.-China race for Electric vehicle dominance continues even as the tariffs are driving the wedge between the two world's biggest economies.

(COMMERCIAL BREAK)

QUEST: Classic phrase, tit for tat. We knew it was coming and neither side's backing down. China has raised its retaliatory tariffs on U.S. goods to 125. Going into effect this weekend. And 145 percent from the U.S. administration announced against Beijing earlier this year.

The Chinese leader, Xi Jinping, says his nation is not afraid. While the White House is claiming world leaders are lining up to make deals. But markets don't seem too optimistic. On the Trump administration pulling off 150 of those deals in less than 90 days.

And amid the turmoil, Chinese nationalists keep bringing up the topic of Taiwan on social media. Apparently, hoping the self-governing island can be used as a bargaining chip. CNN's Will Ripley takes a closer look at what's going on as he reports from Taipei.

[18:40:00]

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): On China's tightly controlled social media, sensors are letting nationalist voices grow louder. If China can keep the 125 percent tariffs for three months, then we won't have any issues taking back Taiwan. Since China and the U.S. have already severed economic and trade relations, why not take this opportunity to recover Taiwan? We need a Civil War to divert attention. Recovering Taiwan cannot be delayed any longer.

UNIDENTIFIED MALE (through translator): At this time, China is confronting the United States and has seized the best opportunity.

RIPLEY (voice-over): Nationalist influencers are framing democratic self-governing Taiwan as leverage. Even though China's communist leaders have never controlled it. Fuel for China's escalating trade war with the U.S. And China feels emboldened. Its top electric vehicle maker, BYD, is now outselling Tesla, and doesn't even bother selling passenger cars to the U.S. A sign Beijing doesn't fear economic isolation.

Some in China even see this trade war as a dress rehearsal testing, how resilient the country's economy might be if there ever were a real war for Taiwan.

UNIDENTIFIED MALE (through translator): China is united from top to bottom. Politically speaking, this system is very superior.

RIPLEY (voice-over): This week, China's foreign ministry posted a quote from former Chinese leader Mao Zedong from the Korean War era. The last time China and the U.S. clashed directly on the battlefield.

Back then, Mao made his position clear, China would not bend to American pressure. Today, Chinese President Xi Jinping also wants to project strength to Washington and his own people. For Beijing, this isn't just about pride, it's about power. And Taiwan's chip industry may be the prize.

RIPLEY: Behind these walls, some of the world's most advanced highly secretive technology. It's so secret, you have to check your phone, your laptop, anything that emits a signal just to walk through the door.

RIPLEY (voice-over): I visited Taiwan semiconductor manufacturing company last year. TSMC makes most of the world's advanced microchips.

TRUMP: As you know, Taiwan pretty much has a monopoly on that market. RIPLEY (voice-over): Last month, TSMC announced a $165 billion U.S. investment, a political win for U.S. President Donald Trump. But in Taiwan, it triggered alarm for some.

TAMMY CHAO, TAIWAN RETIREE: Trump is flipping the whole world upside down. And TSMC, it's Taiwan's treasure. I don't feel it's safe. He's a businessman. So, he'll deal with Taiwan.

RIPLEY (voice-over): Right now, both leaders are playing hardball. Trump says he's ready to talk, but only if Xi makes the first move. But Beijing reacts differently, no call initiated, no compromise made A dangerous standoff where protocol and pride are getting in the way of diplomacy.

And as the world's two biggest economies wait each other out, ordinary people here in Taiwan worry what might get traded away in a deal made by two powerful men each too proud to pick up the phone.

Will Ripley, CNN, Taipei.

(END VIDEOTAPE)

QUEST: Besides the big countries and all the talk, what you realize is that trade and tariffs hits everyone. San Antonio, for example, in Texas, bracing for impact in the most unusual of ways. The city's government of San Antonio has spent years diversifying its local economy. 60,000 local jobs with manufacturing at least. It makes everything from Toyota trucks to food products for companies like Starbucks, Costco, and Whole Foods. And it has cultivated economic relationships abroad.

Given its location in the Southern U.S., you might assume Mexico, but actually, much of the city's trade is with Canada, and those were alongside -- a long distance away. And now, whether it's Mexico or Canada or elsewhere, it's at risk. Ron Nirenberg is the mayor of San Antonio and with me now. Mr. Mayor, good to see you, sir. I'm grateful. I guess you are a classic victim.

MAYOR RON NIRENBERG, SAN ANTONIO, TEXAS: Thank you, Richard.

QUEST: I mean, you're a beneficiary in a sense and a victim. Both of -- you saw NAFTA, you saw the AUSMCA, and you figured that the future economics of San Antonio was in this trilateral arrangement, which you could never have dreamed was going to fall apart like this.

NIRENBERG: Well, the reality, Richard, is that not only has free trade helped rebuild the middle class in our community with, as you said, over 65,000 jobs in the manufacturing sector alone, a rebirth of the manufacturing industry, it has also made us more secure. The relationships between Mexico and Canada and the United States on an economic level have helped secure local communities in terms of the economy, but also our status as secure neighbors.

[18:45:00]

All of that has been strained. And not only that, there -- as you said, there are no winners in these tariff wars, there's only losers. And the biggest losers are families. An all sides of all of the borders, where consumers are going to be paying more -- for more for simple things like groceries, but also, that those goods that are part of the global economy, whether they're automotive products or aerospace or electronics, all of these are going up and it's reducing the buying power of every citizen in every country that's engaged in the escalating conflict.

QUEST: Yes, no. I know having a few difficulties with your video, Mr. Mayor. But we will stay with you. Of course, we can hear what you're saying and that is the most important part. So, how badly -- I mean, the USMCA is just about surviving, but it's going to change obviously with the final deal. What's your biggest fear here? Is it widespread job losses and loss of business?

NIRENBERG: It's a number of things, Richard. It was -- it's job loss. It's the rising in prices for families that have already been struggling from the economic fallout over the last few years and inflation. But long-term, it's a loss of confidence in the American economy and the global economy, and it's a fraying of these important strategic alliances that makes all countries less secure. Economic partnerships are one thing, but strategic security is another.

QUEST: You see, that's the -- but these are arguments, sir, that are well known and have been well rehearsed. And the administration in Washington and even your own governor of Texas is not listening. So, do you feel helpless in -- if you know what I mean, in this sense, though you're the you're in the wind of change.

NIRENBERG: Well, we don't feel helpless. We feel frustrated and angry because Congress has an important role to play here as a check on the president. And they have allowed the president to usurp their authority in international trade policy. So, we are calling on our senators here in Texas, we're calling on our Congress people to do their work, to do their job in providing leadership and a balance of power in Washington.

The challenge here is that the president is doing things that we know don't work. This is a very bad sequel to a very bad movie. We know how tariffs end up, and they are costs on consumers, they slow down the growth and the economic prosperity in all communities globally. And the notion that we can become isolated from the rest of the world and still enjoy the growing sectors that we have had here all across North America is just absolutely ridiculous.

QUEST: Mr. Mayor, I'm grateful. We'll follow through with every may and speak again in a few weeks' time and see how things are progressing. I'm grateful to you, sir, tonight for taking the time. Have a good weekend.

NIRENBERG: Thanks so much, Richard.

QUEST: Now, as we continue tonight, you and me, the green jacket dreams are heating up the second-round highlights at Augusta in just a moment.

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[18:50:00]

QUEST: It's the second round of the masters. It's nearly completed at the Augusta National Golf Club. Britain's Justin Rose remains at the top of the leaderboard. Don Riddell is with me with the latest. Don, good evening.

DON RIDDELL, CNN WORLD SPORT: How you doing, Richard? Yes, it's been a fabulous day here at Augusta. We're heading into the weekend, and I think we're all set for a really, really exciting weekend because we have some big names on the leaderboard with some big stories that could be written here over the next two rounds.

Let's just quickly recap where we are. As you say, Justin Rose, the 44-year-old Englishman, who is the former U.S. Open Champion leads by one at moment. He shot a 71 today. Bryson DeChambeau, the reigning U.S. Open Champion, also doing very well. He had a 68 today, four- under par. So, he's seven-under, just one behind. He would be a superb story if he can go all the way.

But I think we should probably focus most of our attention on Rory McIlroy. He was brilliant today. A 66 six-under par, making up for a couple of double bogies that he had late in his round on Thursday evening.

Now, the reason McIlroy is so fascinating is, apart from the fact that he is a great golfer in the world, number two, he had much more success in the major tournaments earlier in his career. He hasn't won a major tournament now in more than a decade. The Masters is the only one he needs to complete the career Grand Slam. And he has been heartbroken here before, particularly in 2011 when he had a four- stroke lead on Saturday night and he blew it the following Sunday.

So, if McIlroy could hang on here and go all the way, it would be one of many potential wonderful storylines. He was speaking to the media after his round today about how he's managed to cope and how he's adapted as a golfer and as a man and as a father, and how that actually all now helps him. Have a listen.

(BEGIN VIDEO CLIP)

RORY MCILROY, FOUR-TIME MAJOR WINNER: I rushed out of here to get home to see Poppy before she went to bed. So, that was sort of nice to be able to get to see her before she went to sleep. And yes, I guess that's something that I didn't have a few years ago to be able to, you know, get home and have that sort of -- you know, take my mind off the golf a little bit. So -- but, yes, I just -- I feel like I just did a good job of resetting.

I don't think I proved anything. If anything, I just backed up the belief that I have in myself and I -- and the belief that I am as resilient as anyone else out here.

(END VIDEO CLIP) RIDDELL: So, the man there all trying to beat though is the world number one and defending champion, Scottie Scheffler. Richard, he's actually still out on the course playing his final hole at the moment. He's enjoyed a bit of a rollercoaster on quite a windy afternoon and early evening here today. But he is hanging on and he's only two strokes off the pace. So, I think we'll be hearing a lot more from Scheffler this weekend.

QUEST: And it looks like you have a gorgeous evening, Don. It looks like a great weekend ahead. Thank you. Don Riddell, good to see you, sir. Thank you.

Now, one of the biggest shows in television is back this weekend. It is "The Last of Us" who returns for its season two premier on HBO this Sunday. Here we go.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE (voice-over): It is a chance to look for the light once again. Two years after its post-apocalyptic premiere HBO's "The Last of Us" is back for season two. And for the show's co-creator, Craig Mazin, this new season is one that's rooted in reality.

UNIDENTIFIED MALE: You OK?

UNIDENTIFIED FEMALE: Yes.

CRAIG MAZIN, CO-CREATOR, "THE LAST OF US": We have always, as humans, turn to drama to help us process some of these feelings in a way that is safe. We can experience grief and loss. We can experience love and romance and identity and what it means to be threatened in a way that doesn't immediately put us at risk --

UNIDENTIFIED FEMALE: Run at me.

MAZIN: -- but lets us feel the feelings. And I think that's in part why "The Last of Us" is successful, because it has some universal themes that are relevant to everybody and have always been.

UNIDENTIFIED FEMALE: Tommy, I'm an adult. He can't tell me what I can and can't do.

UNIDENTIFIED MALE: Yes. Well, he can tell me.

UNIDENTIFIED FEMALE (voice-over): Just like the video game series, it's based on "The Last of Us" has won both commercial and critical acclaim. Season one took home eight Emmys last year. For those who are new to the show, Mazin stresses it's more than just gore and zombies.

MAZIN: Well, I love being able to take a story that I care about and that I know really, really well. And then, in this other medium, feel a lot of space to explore. You know, I suppose the easiest sales job would be to say, Pedro Pascal, because it's just so much fun to watch him. Bella Ramsey is incredible.

[18:55:00] I -- when I first heard about "The Last of Us," the game, this is a -- you know, over a decade ago, I was like, well, I'm not a big fan of zombies. It's not sort of my thing, but "The Last of Us" is not, it's so much more than that.

UNIDENTIFIED FEMALE (voice-over): HBO, which is part of the same parent company as CNN, has already renewed "The Last of Us" for a third season. Good news for Mazin who says this story has a lot more chapters ahead.

UNIDENTIFIED MALE: There's a very good chance you'd be dead.

MAZIN: We love telling the story. We love working with this cast and we love living in this world. So, it's great to know that we get to keep doing it. We're not going anywhere for a long time.

(END VIDEOTAPE)

QUEST: And of course, HBO Max, part of the same company that owns me, Warner Brothers Discovery. And that is our report and that is our evening for you. Good morning if you are in Asia, good evening if you are in Europe, Middle East, wherever you are, I'm grateful for your company.

I'm Richard Quest in New York. Because the news never stops, neither do we. This is CNN.

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