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Smartphones, Electronics Now Exempt From Latest U.S. Tariffs; U.S.-China Tariffs Set to Raise Consumer Prices; Israel Strike Damages Gaza City's Last Functioning Hospital; IRS to Share Taxpayer Info with Immigration Officials; Concerns Tariff Policies Could Threaten Dollar's Status; Homeland Security Staffers Subjected to Lie Detector Tests. Aired 5-6a ET

Aired April 13, 2025 - 05:00   ET

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

(COMMERCIAL BREAK)

[05:00:37]

KRISTIE LU STOUT, CNN ANCHOR: Hello and welcome to our viewers in the United States and all around the world. I'm Kristie Lu Stout.

Ahead on CNN Newsroom: Donald Trump scales back his tariffs on China, how the latest changes could affect American consumers.

The U.S. President, meanwhile, prepares to meet with El Salvador's controversial leader. It comes as the administration reveals what it knows about one man mistakenly deported to the Central American nation's most notorious prison.

Plus, the Social Security Administration has just declared some immigrants living in the U.S. dead. What's behind this controversial decision?

ANNOUNCER: Live from Hong Kong, this is CNN Newsroom with Kristie Lu Stout.

LU STOUT: Now, President Donald Trump has taken a major U-turn in his trade war with China. U.S. officials say many imported electronics will now be exempt from the president's sweeping tariffs.

On his way to a mixed martial arts event in Miami on Saturday, Mr. Trump brushed off questions about the exemption, but he again touted the strength of the U.S. economy while speaking to reporters on board Air Force One.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), U.S. PRESIDENT: Inflation's dropping. Americans have more money and the country has more money. You know, we've been making two and three billion dollars a day the last couple of weeks. We didn't make that ever. And we're making a lot of money. And then to be nice, I lowered the tariffs on everybody. But we've been making a lot of money. And it's always been the other way around. Other countries, in particular, China, was making a lot of money.

(END VIDEO CLIP)

LU STOUT: Now, electronics like smartphones and computers will not have to face the 145% tariff imposed on China. And LSA tech giants like Apple that rely on China for production can breathe a huge sigh of relief.

Our CNN's Kevin Liptak has more on those tariff exemptions amid the trade war.

(BEGIN VIDEOTAPE)

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: This decision by the president to exempt certain products from China is significant. It could have sweeping implications for global trade. It's also really the first example that we've seen since President Trump started this trade war with China of offering any kind of relief for Beijing.

But I do think it's notable that the tariffs will still apply on some of these products, because, remember, what President Trump has been doing is essentially layering these tariffs one on top of the other when it comes to China. That 145% reciprocal tariff that he applied last week, that is now the exclusion for these products. But they will still be applied.

That 20% tariff that he had put in place to try and curb the fentanyl crisis will still be applied to these items. And it is a relatively long list of products that will now be excluded, whether it's smartphones, laptop computers, transistors, flat panel monitors, hard drives, semiconductors, all products that for the most part are not manufactured in the United States. Those will now be excluded.

That could be a real boon for American consumers who had been worried about higher prices on, for example, their iPhones. It could also be a real benefit to the companies that make them. You know, Apple is someone that had been warning that these products could now cost more. They have also spent the last two months cultivating President Trump and his administration. That now perhaps paying off.

But I do think it will have to be seen exactly how long this reprieve will last, because when you talk to White House officials, they do make the point that the president has advocated in the past for more specific tariffs on these products, essentially a more finely tuned tariff program, essentially opening the door for tariffs, potentially at a lower rate on these items going forward.

I also heard from a White House official that the president will be ordering up a study, a national security study of semiconductors, those computer chips that power so many of the popular American consumer products. Oftentimes those studies will result in tariffs once they're completed.

Now, what the White House said on this, this is a statement from the Press Secretary, Karoline Leavitt. She said that, "President Trump has made clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones and laptops. That's why the President has secured trillions of dollars in U.S. investments from the largest companies in the world, including Apple, TSMC,' which is the Taiwanese chip manufacturer, 'and Nvidia. At the direction of the President, these companies are hustling to onshore their manufacturing in the United States as soon as possible."

[05:05:35]

As soon as possible is a relative term here. It could potentially take decades for these companies to uproot their production in Asia and move it into the United States. I think all of this just underscores the uncertainty that continues to hang over the president's trade agenda as really this trade war continues apace.

Kevin Liptak, CNN, West Palm Beach, Florida.

(END VIDEOTAPE)

LU STOUT: Economist, author and podcast host David McWilliams, thank you for joining us.

DAVID MCWILLIAMS, ECONOMIST AND AUTHOR: Morning, how are you?

LU STOUT: Doing very well. We've got a lot of threads to untangle here. I've been following your podcast, your thoughts that you've published to publications like "Time." Let's start first on the top news line this hour.

Trump's latest tariff move with these exemptions, exemptions on electronics, on stuff like smartphones, computers, monitors, et cetera. Your thoughts on this. How much relief does it give?

MCWILLIAMS: I think it's beginning to dawn on the Trump administration just how significant China is in the American consumer basket. It will have a massive impact on America and your average American family. You think, for example, Kristie, everything we're talking about today, my monitor, my laptop is iPhone. They're all made in China. OK.

So, what we're seeing is the United States administration realizing now that American consumers will be terribly, terribly out of pocket as a result of the tariffs.

Let's get -- let's go to the chase. Tariffs are a sales tax. There are tax on consumption. So who is going to pay that tax? The American consumer in the main. What we've seen all week is we now know that the official opposition in the United States is not the Democratic Party. It is the bond market and specifically certain areas of the bond market and in general financial markets.

So what we're seeing is financial markets are reacting. The White House is being bullied, ironically, in an effort to bring back Main Street. Main Street, the White House has been bullied by Wall Street. It's actually you couldn't really make this stuff up. But to get to the point, your average American consumer and I'm talking your middle class working American family is going to pay through the nose. Why? Because most of the stuff that we use, I'm talking about things

like micros -- microwaves, hair dryers, toys, Barbie dolls, all these things that the average American buys. It's pretty family. They're made in China. It's very simple.

LU STOUT: So these exemptions will be a major relief for U.S. consumers, as you laid out for big tech companies like Apple for the markets. And we're going to see that when they open on Monday. These exemptions are also on the face of it, a major concession to China.

So, David, your thoughts here. What does this mean for the general clash on trade between U.S. and China?

MCWILLIAMS: I think what you've seen is the expression, Kristie, the devil is in the detail always applies. Right. So it's the detail of what we're seeing. It's all very well to impose tariffs on China and act like the big man. But once it becomes quite obvious that those tariffs are going to hit the very people, the very MAGA Republicans who vote for you, the very people who actually are suffering, the very people whose, for example, existence is paycheck by paycheck, those people are going to suffer incredibly badly. And as a result of that, the United States is responding in a way what we've seen, which is tariffs on, tariffs off, exemptions, et cetera.

I think what we're seeing really is that on the American side, there is chaos. I think on the Chinese side, there is real anxiety, but at least in terms of the public front and the public face of Beijing has been stoic and silent and is basically saying, you know, have a go if you think you're hard enough. We are still going to be here. I mean, as Kevin, your reporter said, it may take decades, decades to unravel the supply chains that have been put in place over the last 20, 25 odd years.

Now, in that period of transition, American consumers are going to pay, number one. Number two, as the Trump administration reduces tariffs on specific products, they're going to get less money. And let's think one of the objectives here is to narrow the American budget deficit, to raise revenue, to reduce the American debt GDP ratio.

[05:10:05]

So what you're seeing is every time there's an exemption, Kristie, less money comes into the United States and the tariffs become less and less significant.

My own view is that if we keep going down this road, think of the road we've been down since last Thursday week when the tariffs were announced in the Rose Garden, Kristie. We have seen exemptions. We have seen wealth destroyed. We have seen the bond market go mad. We have seen climb downs. We have seen folding, all these things. This is now becoming a pattern of behavior, Kristie. And that pattern of behavior is --

(CROSSTALK) LU STOUT: A chaotic pattern of behavior. And I wanted to quickly ask you, David, just before we let you go, the hit on U.S. assets here. Because of the chaos that has taken place, the turmoil, the up and down, the pause and start, the exemptions, et cetera. You mentioned at the top U.S. government bonds falling, U.S. dollar weakening, right, markets in disarray. From your corner of the world, how are you viewing the U.S. economy right now?

MCWILLIAMS: Well, very good question, because Ireland is almost like a little bit of the American economy. In Europe, we are so invested in the United States, and they are so invested in us. We are worried. Everybody in Europe is worried. And there's actually moves now. You can see it. Large pension funds thinking, you know, is the United States the bet it was, the safe bet it was over the last couple of decades? Is it the gold standard anymore? And I think what we're seeing is a reassessment of the United States as a trading partner.

And the consequence of that is a reassessment of the United States as an asset base. And so don't forget, the United States owes the world. But when you net out all the global positions, who owes money to who, the United States is a massive debtor. The Bank of International Settlements claims the United States owes the world $14 trillion.

Now, if that money were to start leaving the United States or not being reinvested, then I think the bond market would go haywire. And as I said at the top, the official opposition to Donald Trump is not the Democratic Party. It is the bond market.

LU STOUT: David, we'll leave it at that. Thank you for giving us some clarity as we are all stuck in this Trump-induced cycle of fear and relief. David McWilliams joining us live from Dublin. Thank you. Take care.

MCWILLIAMS: Thank you, Kristie.

LU STOUT: All right. Now, Mr. Trump is positive about the first round of nuclear talks with Iran. He said that they are, quote, "going OK after negotiators held their initial meeting in Oman on Saturday." They described it as constructive and agreed to meet again next week.

Now, the U.S. President has given Iran two months to reach a new nuclear deal or face a possible military action. But he didn't spell out how the new agreement would be different from the one he pulled out of during his first term. Iran's Foreign Minister described how the talks played out on Saturday.

(BEGIN VIDEO CLIP)

ABBAS ARAGHCHI, IRANIAN FOREIGN MINISTER (through translator): I think the Omani Foreign Minister shuttled between the Iranian and U.S. delegations about four times. And the views of both sides were conveyed to each other. It lasted about two and a half hours. And in my opinion, as a first meeting, it was a productive one. It took place in a calm and positive atmosphere. No inappropriate language was used. Both sides demonstrated their commitment to advancing these negotiations until reaching an agreement that is desirable for both parties and conducted on equal terms.

(END VIDEO CLIP)

LU STOUT: OK, this -- all right, this just in, an Israeli airstrike has badly damaged the last functioning hospital in Gaza City. Our CNN Salma Abdelaziz is watching this story. She joins us now live from London. And Salma, what are you learning about the strike and the aftermath of the strike?

SALMA ABDELAZIZ, CNN REPORTER: So Al-Ahli Hospital, which, as you just said, is the last functioning hospital in Gaza City, was struck in the early hours of Sunday morning. We understand from hospital officials that they received a call from the Israeli military giving them just 20 minutes to evacuate, to head out into the streets with their patients in gurney. So quick was the evacuation that one young boy with a head injury died.

Staff was trying to get patients out. The strike has damaged this hospital very badly, as you mentioned. The emergency department has been damaged as well as a nearby church.

This hospital sits in the only complex, the only Christian church in Gaza City. It's the fifth time, according to church staff, that this hospital has been struck during this conflict.

Now, there was no injuries, no one killed in this strike. Israel says it carried out the airstrike on the hospital because it says that it was being used as a Hamas command and control center. Now, it provided no evidence of that, but it did say that the Israeli military took action, took steps to try to prevent civilian casualties.

Now, the medical system in Gaza is absolutely on the brink of collapse. The World Health Organization has been warning of shrinking humanitarian access. It says that it has been denied access to hospitals, access to humanitarian missions to bring more aid, to bring more resources to those hospitals.

[05:15:17]

And, again, with this being the last functioning hospital in Gaza City, that just emphasizes, again, how dire that situation is for civilians still trapped in the enclave with no signs, no progress on ceasefire talks.

LU STOUT: As you've been reporting, the last functioning hospital in Gaza has been hit, and this is the fifth time this hospital has been hit. Salma Abdelaziz reporting for us. Thank you very much, indeed, for the latest there.

And this also just into CNN. We're learning that officials say at least 21 people were killed in a Russian strike on the northeastern city of Sumy. Two ballistic missiles hit the city center where people were attending Palm Sunday church services. That is one of the busiest church-going days of the year. Ukrainian officials say Russia was trying to inflict as much damage as possible to Sumy and its people. You're watching CNN Newsroom. And still to come, what the White House

is saying about the man they wrongfully deported to El Salvador and what, if anything, they're doing to get him back.

Plus, the Trump administration's latest scheme to make the U.S. inhospitable to migrants is to count thousands of them as dead.

Plus, the crisis inside the IRS after the agency agreed to share taxpayer data with immigration officials.

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[05:20:30]

LU STOUT: Welcome back. Now, El Salvador's President Nayib Bukele is in the United States this weekend. He arrived on Saturday ahead of a visit with U.S. President Donald Trump. Mr. Trump says he's looking forward to it. In a social media post, the U.S. President praised him for accepting and imprisoning, quote, "violent alien enemies." So far, the Trump administration's deportations to El Salvador have led to at least one documented wrongful deportation.

And the migrants are in the custody of a leader with a well-documented history of human rights abuses. And in a country where all constitutional rights are suspended. The Trump administration says that Maryland man who was mistakenly deported to El Salvador's notorious mega prison is, quote, "alive and secure." This is the only information the Trump administration has offered regarding Kilmar Abrego Garcia's well-being and whereabouts.

The father of three was a legal resident who was granted protected status by an immigration judge in 2019. However, he was arrested and deported last month on what the White House calls an administrative error. The Supreme Court has ordered the Trump administration to facilitate his return.

The White House is trying to force thousands of migrants with valid Social Security numbers to self-deport by taking away those Social Security numbers and by making daily life nearly impossible. The Department of Homeland Security has requested the Social Security administration add more than 6000 living people to its database of dead people. Rafael Romo explains.

(BEGIN VIDEOTAPE)

RAFAEL ROMO, CNN CORRESPONDENT: The Social Security administration already has a list previously created to track people who have passed away. It is now also going to be used to invalidate legally obtained Social Security numbers that were given to some immigrants. According to an official, the Trump administration is hoping this will drive these immigrants to self-deport, giving that it will become virtually impossible for them to do most financial transactions.

According to a White House official, the Department of Homeland Security has identified over 6300 temporarily paroled aliens on the terrorist watch list or with FBI criminal records. The administration provided no evidence to back up the assertion. DHS terminated parole for all of these individuals effective April 8th.

Furthermore, the Social Security team, the official told us, determined these immigrants were ineligible to receive Social Security benefits and moved their Social Security numbers to a list called Ineligible Master File. This is a new name for a list that used to be called Death Master File. And this is important because this file was previously used only for people who had died so that no unqualified individuals would have access to Social Security benefits.

An Atlanta immigration attorney explained to us the severe impact this is going to have on immigrants whose previously valid Social Security numbers were placed under Death Master File.

BEGIN VIDEO CLIP)

DUSTIN BAXTER, IMMIGRATION ATTORNEY: They're going to be cash dependent because even though they have work authorization in these valid Social Security numbers, they're not going to be allowed in most instances to open bank accounts, to cash checks, to apply for credit cards, to lease apartments, to get on their company health insurance. All those things are going to become virtually impossible to them.

(END VIDEO CLIP)

ROMO: A Trump administration official told CNN this should not be a surprise to anybody. In a statement, Liz Huston, a White House spokeswoman, said that "President Trump promised mass deportations and by removing the monetary incentive for illegal aliens to come and stay, she said, we will encourage them to self-deport. He is delivering on his promise he made to the American people."

But Dustin Baxter, the Immigration Attorney we spoke with, told us that the immigrants affected by this action are all people who were vetted before they came to the United States and were paroled in lawfully. This action targets immigrants who have Social Security numbers and may have entered the United States under programs that have ended, like the Biden administration's temporary work programs.

Rafael Romo, CNN Atlanta.

(END VIDEOTAPE)

LU STOUT: Several universities in Florida are joining a statewide push to cooperate with immigration and customs enforcement. The University of Florida said this week that it signed an agreement to allow local law enforcement officers to act as immigration officers. School officials confirmed that four of their students have had visas revoked.

[05:25:05]

It comes as the Trump administration faces a new lawsuit to stop visas from being taken from international students. It was filed by a Georgia law firm that also requested a temporary restraining order to reinstate visas that have already been revoked late last month. Secretary of State Marco Rubio said more than 300 student and visitor visas have been revoked.

Now, the IRS has agreed to give U.S. immigration officials access to taxpayer information to help them deport more immigrants. The agreement triggered a series of resignations at the IRS, and the deal is also expected to face legal challenges.

Marshall Cohen has more.

(BEGIN VIDEOTAPE)

MARSHALL COHEN, CNN REPORTER: Huge news this week with the IRS reaching an agreement to provide sensitive taxpayer information to the immigration authorities, including the Department of Homeland Security and ICE.

Now, this is not typically what happens, but the Trump administration pushed this plan through over the objections of multiple career officials at the IRS. Remember, undocumented immigrants have been encouraged for generations to come forward, register with the IRS and pay the taxes that they owe.

They've been told that if they do that, their information will stay secret. But this new deal between the IRS and ICE changes all of that. And ICE can come to the IRS to confirm the home addresses of people that they believe are here illegally, potentially paving the way for their deportation.

Now, this was highly controversial. Multiple sources told me that there were several folks at the top of the IRS who refused to sign this agreement, experienced career officials that thought that this was simply illegal. They wouldn't sign it, so it went all the way up to Treasury Secretary Scott Bessent, who put his name on the papers, and then it was made public earlier this week.

Now, in the wake of this agreement, multiple top officials at the IRS have announced their plans to leave, including the acting commissioner, the chief privacy officer, the chief risk officer, and the chief financial officer. So that creates a mass exodus of some of the most experienced career officials that have been running the tax collection agency. And it couldn't come at a worse time with Tax Day on Tuesday. Of course, that's the deadline for Americans to file their taxes and pay what they owe.

So far, it does not appear that all of this chaos and disruption at the IRS has had a negative impact on tax season and on the tax refunds that millions of Americans look forward to receiving every year. But nonetheless, it has created a lot of tension at the agency, a lot of fears among immigrant communities, and tons of questions going forward.

There is a court hearing scheduled for this upcoming Wednesday, where a judge will weigh whether or not this new data-sharing deal with ICE is legal. So this may not be the final word, even though the Trump administration maintains that this is perfectly lawful, perfectly above board, and necessary to crack down on undocumented immigrants who have no business being in this country. Marshall Cohen, CNN, Philadelphia.

(END VIDEOTAPE)

LU STOUT: You're watching CNN Newsroom. And when we come back, we'll take a closer look at how President Trump's tariff war is threatening the dollar's status as the world's reserve currency.

And concern at FEMA, as some of its staffers are subjected to lie detector tests. We'll explain why after the break.

(COMMERCIAL BREAK)

[05:32:16]

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

President Donald Trump says nuclear talks between the U.S. and Iran are, quote, "going OK." Representatives of the two countries met in Oman yesterday. Both countries say failure to reach a deal could lead to further escalation in the Middle East.

Smartphones and computers are being excluded from Donald Trump's latest round of tariffs on China. The exemption comes after the trade war between the two countries escalated this week. Mr. Trump imposed a 145% tariff on Chinese imports. China responded with a 125% tariff. The move would have had a major impact on tech giants like Apple.

Now, questions still remain about whether products like microchips and semiconductor imports would be included in the exemptions. When asked about semiconductors on his way to Miami, President Trump said he'd know more by Monday.

Now, all of this is creating a crisis of confidence surrounding the U.S. dollar. And that turbulence is calling into question its status as the world's reserve currency. The dollar has been a safe haven for decades, ever since the end of World War II and the expansion of international trade, where leaders devised a system built on exchange rate stability where the dollar was dominant. That dominance lives on to this day.

According to the IMF, nearly 60% of allocated reserves globally are held in dollars. And that gives the U.S. a huge advantage over other countries because U.S. government debt, backed by the dollar, is very attractive. Interest rates are lower. The U.S. gets to borrow from other countries in its own currency. So if the U.S. dollar loses value, debt does too. American businesses can make international transactions in dollars without having to pay conversion fees.

For more on the economy, on the tariff drama, I'm joined now by Karsten Junius. He is the Chief Economist and Head of Economic and Strategy Research of Bank J. Safra Sarasin. And he joins us now.

Sir, thank you for joining us.

KARSTEN JUNIUS, CHIEF ECONOMIST, BANK J. SAFRA SARASIN: Yes, hello, good morning.

LU STOUT: Now, you have called this moment a, quote, "rough ride to a new world order." And the central banks, in particular, are in a tough position. So let's talk about this angle. What will central banks have to do next as Trump forges on with this trade war?

JUNIUS: Well, see, one thing that we learned this week is that central banks don't jump in as quickly as they did during the COVID crisis or the global financial crisis, as they regard this tariff shock not as a natural disaster, but as a political shock where they have to wait and see until they see an impact either in the gross numbers, in inflation, or in the financial system. And then the Fed actually has said that they would step in. But so far, they wouldn't.

[05:35:30]

LU STOUT: But regarding this, nonetheless, as a big political shock. And let's talk about trust. You know, what has this ever-evolving stop, start, pause exemptions, Trump trade war, what has it done to trust the credibility of the United States and the American economy?

JUNIUS: Well, see, we have a huge shock to uncertainty and that by itself would lead investors to step back. I cannot imagine that foreigners are ready to jump and build up a production chain in the U.S. in order to change their supply chain. The latest twist that we have seen with semiconductors is just speaking and proving that point.

And in general, I think we have a loss of trust, first in U.S. assets, as we now realize that they also should trade with a political risk premium. We have a loss of trust in the global trade order, the rules- based order that we -- actually the U.S. have set up in the last decades. And nobody really knows where he or she stands. And I think that is the biggest collateral damage. We cannot trust the international order, but also we cannot trust the checks and balances the U.S. so far was famous for. It now all depends on more or less the mood or the assessment of one person. We are moving to a presidential system without the rules that we could rely on so far.

LU STOUT: This is such an important point here. Trust is severely shattered. The standing of America is shaken. Your thoughts about the standing of the U.S. dollar and if people are selling U.S. assets, what are they buying?

JUNIUS: We see that they are buying gold and that is for a very good reason. It's a very liquid and internationally accepted asset. And I very much believe that this rally of gold will continue in the next weeks, months and years as everyone is trying to diversify away from the U.S. dollar.

And in general, I also believe that investors realize how much overexposed they are to U.S. assets in general, to treasuries and to equities. In the past, it was extremely safe bet just to buy the S&P or to buy the MAC 7, buy anything based in the U.S.

And you actually didn't have to have many asset management or portfolio management skills. Buying the U.S. market was an easy thing to outperform the global benchmark. Now that is not the case anymore. And I think every investor will re-evaluate his or her portfolio in order to see where they actually can reduce leverage to the U.S. market to diversify in all things. I also believe that the euro actually would be benefiting from that. And of course, the Swiss franc.

LU STOUT: Got it. So we're going to see currencies like the Swiss franc, even perhaps the Japanese yen, being regarded as safe haven currencies, their value to rise along with the price of gold.

Final question for you. Right now, the focus is on tariffs, but what will come next? Because after this trade war, what else could Donald Trump unleash?

JUNIUS: So I think we have to take him seriously, that he is addressing non-tariff barriers in other areas, regulation of services, exports. So those are probably the next things. And that is something we have to be aware of and will remain cautious for that very reason.

LU STOUT: Yeah, more measures of financial repression to come.

Karsten Junius, Chief Economist and Head of Economic and Strategy Research at Bank J. Safra Sarasin, thank you for your insight. Thank you for joining us.

JUNIUS: Thank you. Have a good Sunday.

LU STOUT: Now, the Department of Homeland Security has made some 50 staffers take lie detector tests in recent weeks. This is including the acting administrator of FEMA. Now, officials say that this is part of efforts to root out national security leaks.

Gabe Cohen reports.

(BEGIN VIDEOTAPE)

GABE COHEN, CNN CORRESPONDENT: Well, the Department of Homeland Security is standing by its use of these lie detector tests. A spokesperson for the department telling me in a statement, quote, "DHS is unapologetic about its efforts to root out leakers that undermine national security. We are agnostic about your standing, tenure, political appointment, or status as a career civil servant. We will track down leakers and prosecute them to undermine national security. We are agnostic about your standing, tenure, political appointment, or status as a career civil servant. We will track down leakers and prosecute them to the fullest extent of the law."

[05:40:24]

Now, to be clear, government agencies, past administrations, have used lie detectors to catch leakers. But usually it was for classified, highly sensitive national security information. And so there's growing concern at FEMA where these tests are primarily being used because of alleged media leaks. Several of the officials tested failed their polygraph, according to that DHS spokesperson, although she wouldn't specify exactly what information they're accused of leaking. One of them was placed on administrative leave this week and actually escorted out of FEMA's office. And we have learned that FEMA's acting administrator, Cameron Hamilton, a Trump appointee, was also tested, and he was cleared, according to DHS.

Now, the FEMA officials I have spoken with are using words like witch hunt and garbage to describe these tests. One of them told me, quote, "I find it very, very hard to believe that within the normal course of business, any of these employees had their hands on classified material. They are trying to incite fear. They are trying to get rid of people."

President Trump and his allies have been criticizing FEMA for months now as ineffective and unnecessary, and Homeland Security Secretary Kristi Noem has promised to eliminate the agency altogether.

And we've also heard from whistleblower support organizations that are raising concerns about these lie detector tests and, in particular, the high volume of tests that we're seeing under this administration.

One of them telling me what used to be a sensitive, carefully considered, high-risk decision is now a knee-jerk reaction, and that, they say, is what makes this scary.

Gabe Cohen, CNN, Washington.

(END VIDEOTAPE)

LU STOUT: You're watching CNN Newsroom. And just ahead, voters in Ecuador head to the polls in just a few hours. The presidential runoff is between two candidates, both promising to crack down on gang- related violence. Just ahead, where their plans differ.

(COMMERCIAL BREAK)

[05:45:29]

LU STOUT: OK, we are following breaking news out of Ukraine. Local officials say at least 21 people were killed in a Russian strike on the northeastern city of Sumy. Two ballistic missiles hit the city center, where people were attending Palm Sunday church services. This is one of the busiest churchgoing days of the year.

Russia has increased air attacks and missile strikes on the Sumy region in recent weeks as it has pushed Ukrainian forces out of much of the adjoining Russian territory of Kursk. Its forces have also occupied a few small settlements just inside the Sumy region.

Russia is denying that Chinese soldiers are fighting alongside its forces in Ukraine. President Volodymyr Zelenskyy says that Ukraine has identified more than 150 Chinese nationals fighting for Russia, and he says two of them have been captured. China says the claim is groundless. Meanwhile, Russia's Foreign Minister is praising U.S. President Donald Trump for closing the door on Ukraine's NATO membership. Mr. Trump said Ukraine's push to join NATO is, quote, "probably the root cause of the war." The Russian minister said on Saturday that was the Kremlin's position from the get-go.

Now, voters in Ecuador will head to the polls in just a few hours. They're taking part in a presidential runoff election between two candidates that have a lot in common. Both the incumbent, Daniel Noboa and Luisa Gonzalez, say that they will crack down on violent crime. But, as David Culver reports, they would likely handle the issue very differently.

(BEGIN VIDEOTAPE)

DAVID CULVER, CNN INTERNATIONAL 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 (on camera): You can see in his hand right there, those are two. That's 200 grams, according to police, of cocaine that they've seized. That's what he's pulling out right now. 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 (through translation): Are there still bodies insides?

UNIDENTIFIED MALE: No.

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 No. 1 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 TV 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 2,500 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, Noboa faces a strong challenge from left-wing candidate Luisa Gonzalez.

LUISA GONZALEZ, ECUADORIAN PRESIDENTIAL CANDIDATE: (SPEAKING FOREIGN LANGUAGE).

CULVER (voice-over): 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, repeated like a prayer. Ecuador, they say, was never like this before.

[05:50:02]

David Culver, CNN, Guayaquil, Ecuador.

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LU STOUT: OK, now we want to take you live to the Vatican where Pope Francis is appearing. He has appeared at today's Palm Sunday service in St. Peter's Square. Due to the Pope's recent battle with double pneumonia, which hospitalized him for 38 days, it was uncertain if he would attend any of the Holy Week events. But here he is in traditional papal attire, appearing before the faithful as the Catholic Church ushers in the final days of the Easter season.

You're watching CNN Newsroom. We'll be back right after this.

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LU STOUT: Welcome back. Now today's Masters Golf Tournament could have a spectacular finish in just a few hours. Northern Irishman Rory McIlroy surged to the lead in round three yesterday with an eagle and two birdies in just his first three holes. But he could be facing a dogfight.

American Bryson DeChambeau is on a roll as others are also closing in. As CNN's Don Riddell explains, winning the green jacket would give McIlroy the career grand slam wins in all four majors.

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DON RIDDELL, CNN WORLD SPORT: Rory McIlroy has enjoyed so much success throughout his career, but nowhere has he suffered on the course more than here at Augusta National. Now in 2011, McIlroy blew a four-stroke lead in one of the most epic meltdowns in Masters history. And nobody here will want to witness anything like that again.

RORY MCILROY, FOUR-TIME MAJOR WINNER: I, just as much as anyone else, know what can happen on the final day here. So, you know, I've got a lot of experience. I -- you know, I came in here talking about being the most complete version of myself as a golfer. And, you know, I just have to keep reminding myself of that and remind myself that no matter what situation or scenario I find myself in tomorrow, I'll be able to handle it.

RIDDELL: A few weeks ago, McIlroy's daughter Poppy came home from school and asked if Daddy was famous. When telling the story, he laughed and said, well, it depends who you talk to. If he wins here tomorrow, there'll be no denying it. He'll become only the sixth player to complete the modern career Grand Slam. And the other five, Gene Sarazen, Ben Hogan, Gary Player, Jack Nicklaus, and Tiger Woods are considered the titans of the game. Back to you.

Back to you.

(END VIDEOTAPE)

LU STOUT: Thank you, Don Riddell. Now, residents of Toronto embraced their inner child on Saturday as they took part in the city's annual Pillow Fight. About 100 people gathered for the good-natured melee with friends and strangers, letting off some steam in front of City Hall.

Now the event is in its fourth year. It was revived after the COVID-19 pandemic. And it looks like good, clean, fluffy fun. I can get in on that.

That wraps up this hour of CNN Newsroom. I'm Kristie Lu Stout. Thank you for joining us.

And for those of you watching in the U.S., CNN This Morning is next. And for those of you overseas, it's Marketplace Asia.

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