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Trump's Tariffs Spark Trade War with Canada, Mexico & China; Atmospheric River Could Bring Flooding to California. Aired 6-6:30a ET

Aired February 03, 2025 - 06:00   ET

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


KASIE HUNT, CNN ANCHOR: Its Monday, February 3. Right now, on CNN THIS MORNING.

[06:00:03]

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We put tariffs on. And they owe us a lot of money. And I'm sure they're going to pay.

(END VIDEO CLIP)

HUNT: Trade war is on. President Trump set to enact tariffs on America's biggest trading partners, hinting this is just the beginning.

Plus --

(BEGIN VIDEO CLIP)

ANDREW MCCABE, CNN CONTRIBUTOR: Nowhere in my entire 21-year history in the FBI did I ever see anything like that.

(END VIDEO CLIP)

HUNT: Showdown at the FBI. The Justice Department questioning thousands of career law-enforcement officials over their role in January 6th investigations.

And then --

(BEGIN VIDEO CLIP)

TRUMP: I think Elon's doing a good job. He's a big cost cutter.

(END VIDEO CLIP)

HUNT: What is Elon up to? The head of DOGE vowing to eliminate the agency behind most of America's foreign aid. This as Musk's team gains access to the treasury's multi-trillion-dollar payment system.

Plus --

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: The Grammy goes to --

UNIDENTIFIED FEMALE: "Cowboy Carter," Beyonce.

(END VIDEO CLIP)

HUNT: Grammy Awards Beyonce, Kendrick Lamar, Sabrina Carpenter, others walking home winners on music's biggest night.

All right. It is 6 a.m. Here on the East Coast. A live look at the Washington Monument. The White House still dark here at 6 a.m. in Washington, D.C.

Good morning, everyone. I'm Kasie Hunt. It's wonderful to have you with us.

The promised trade war, it's here. President Donald Trump over the weekend making good on campaign promises that have made the business community nervous and that threaten to raise prices for Americans.

And he's targeting our neighbors, including Canada, whose troops have fought alongside Americans in our foreign wars.

Plus, this might not be the last of it. The new tariffs include a 25 percent markup on goods from Canada and Mexico. China will see a 10 percent tariff. These changes set to take effect tomorrow.

Canada isn't taking it lying down. Stores immediately started pulling American goods off the shelves. Tennessee whiskey, bourbon from Kentucky.

And this was the scene at the start of an NHL game between the Ottawa Senators and the Minnesota Wild.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (singing): By the dawn's early light, what so proudly --

UNIDENTIFIED MALE: Boo!

UNIDENTIFIED MALE: Boo!

UNIDENTIFIED MALE: Boo!

(END VIDEO CLIP)

HUNT: Yes. Those are Canadian fans in Ottawa, loudly booing "The Star- Spangled Banner." It happened at an NBA matchup in Toronto, too.

The Canadian prime minister, Justin Trudeau, had this reminder of why booing the anthem is so stunning from our neighbors to the North.

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JUSTIN TRUDEAU, PRIME MINISTER OF CANADA: From the beaches of Normandy to the mountains of the Korean Peninsula, from the fields of Flanders to the streets of Kandahar, we have fought and died alongside you. During your darkest hours, during the Iranian hostage crisis, those 444 days, we worked around the clock from our embassy to get your innocent compatriots home.

(END VIDEO CLIP)

HUNT: American presidents past, Republican presidents past seemed to share that view.

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RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: We should beware of the demagogues who are ready to declare a trade war against our friends, weakening our economy, our national security, and the entire free world, all while cynically waving the American flag.

(END VIDEO CLIP)

HUNT: And then there's the modern-day political reality.

The tariffs will make things more expensive for Americans. Former Senate majority leader Mitch McConnell from Trump's party, at least ostensibly, saying this on "60 Minutes" just last night.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): It will drive the cost of everything up. In other words, it'll be paid for by American consumers. I mean, why would you want to get in a fight with your allies over this?

(END VIDEO CLIP)

HUNT: Even President Trump seems to be aware that the effect of all this might be the opposite of what people elected him to do, which was to lower prices.

(BEGIN VIDEO CLIP)

TRUMP: I disagree with the leadership of Canada, and something is going to happen there. But if they want to play the game, I don't mind. We can play the game all they want.

Millions of people flowed into our country through Mexico and Canada, and we're not going to allow that. We may have, short term, some little pain, and people understand that.

(END VIDEO CLIP)

HUNT: Joining us now to discuss, our panel is here: Stephen Collinson, CNN politics senior reporter; Alex Thompson, CNN political analyst, national political reporter for Axios; Meghan Hays, former Biden White House director of message planning; Matt Gorman, former senior adviser to Tim Scott's presidential campaign.

Welcome to all of you. Thank you so much for being here. Stephen Collinson, let me start with you. Big picture here. Donald

Trump is clearly choosing one set of the priorities that he campaigned on over another.

I mean, he threatened this -- this tariff war. He said he was upset about deportations and about immigration and about drugs. But he also said he was going to lower prices.

[06:05:05]

STEPHEN COLLINSON, CNN POLITICS SENIOR CORRESPONDENT: That's right. And I think this is one of the big risks of the approach he's taking, is that this could spike inflation. That could make the Fed keep interest rates high. That could keep the housing market locked up.

So, there's lots of consequences if the president does go ahead and these tariffs come into force Tuesday morning at 12:01 a.m. And they stay in force for a long time.

I think this is symptomatic of a break with the way that the United States has used free trade over the last 40-odd years. Putting pressure on -- on an ally like Canada, especially, although they don't have the capacity, like Mexico, to paralyze the U.S. economy; they can't push the U.S. into a recession like the U.S. can to them, they can hurt Americans. And this is going to have consequences.

So, it's going to be interesting to see.

One of the big questions of this presidency is how far is Trump willing to go? Is he willing to pay the price for some of the transformational policies that he wants to effect? If he wants to completely rebuild the world economy and the U.S. manufacturing base?

HUNT: Matt, is Trump right there that some people -- that people will go along with some short-term pain, as he put it?

MATT GORMAN, FORMER SENIOR ADVISOR TO TIM SCOTT'S PRESIDENTIAL CAMPAIGN: Well, I think this goes to the psychology of Trump, whether it's businessman or as a president, he wants to get you in a room, cut a deal, sell it. And, you know, I think this is a tactic in that thing.

We saw this we were talking about this last Monday with Colombia. Right? He's been emboldened by whether it was the work in Colombia doing very similar things. Threatening, again, tariffs and that sort of thing to extract what he wanted from policies there.

You saw it last night with Panama, with breaking with the Chinese.

So, I think this is not intended to stay this way. This is not an end game. This is a tactic he is using to extract policy concessions from this.

And again, what I would expect, what we saw this at the end of November when he threatened a lot of this, right around Thanksgiving. Trudeau immediately went to Mar-a-Lago. They had a face-to-face meeting and ended OK.

Sheinbaum took a different tact of in Mexico. We'll see how that goes.

I would expect sometime this week, Canadian officials, maybe Mexico. We'll see. At least Canadian [SIC] to go face-to-face with Trump and work something out. I think that is the end game in this.

HUNT: Let's put up on the screen, if we can, the -- the stock market futures from the weekend. OK. Because Alex Thompson, one of the things that Donald Trump responds to, we know, are the markets. How is this going to impact him?

ALEX THOMPSON, CNN POLITICAL ANALYST: Short term, not -- not that much. Long term, it really could.

And this latest -- you know, the first two weeks what we've really seen is this the latest example of what is going to become an imperial presidency in many ways.

You mentioned that we haven't seen this sort of trade war in 40 years. And a lot of the laws that Trump is using give him almost unilateral power. They're usually -- the specific law has really been used for, like, terrorists and rogue states. He is using the fentanyl crisis and the immigration crisis to justify, basically, completely unilateral actions.

MEGHAN HAYS, FORMER BIDEN WHITE HOUSE DIRECTOR OF MESSAGE PLANNING: I mean, a couple of things here, right? And the exit polls are really clear that the No. 1 issue of people who voted for Trump was inflation. This is going to do the exact opposite of bringing inflation down, and it's going to make inflation go higher, which means the cost of goods are going to go higher.

You know, people in L.A. are going to try to rebuild their homes. Sixty or 70 percent of the lumber comes from Canada. It's going to be impossible for people to afford to rebuild.

You saw all these different manufacturing groups and the Builders Association putting out letters to Trump, talking about the cost.

HUNT: -- raw materials are excluded. Even if tariffs are applied on manufactured goods elsewhere, they'll leave raw materials out, because that can hurt us more, in many ways, than other goods.

HAYS: But the Builders Association, like, sent a letter to Donald Trump over the weekend saying how much this is going to impact the cost of housing, bring housing prices up, as well as jobs are going to be impacted.

So, I think this is going to have more impact than he thinks it's going to have, even if it is only a couple of weeks. This is going to have lasting impacts on our economy, on the backs of the middle class.

HUNT: Yes. Well, and so "The Wall Street Journal" editorial board called this tariff war the dumbest trade war in history, in a headline over the weekend, the 25 percent tariffs. We can put that headline up. And then Donald Trump responded this way, saying, quote, "THIS WILL BE

THE GOLDEN AGE OF AMERICA. WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT.) BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID."

I mean, I guess Trump versus "The Wall Street Journal" editorial board isn't necessarily new of late, but --

COLLINSON: But I mean, they're the globalists. They represent, as far as Trump is concerned, the people that hollowed out the U.S. economy by sending low-wage jobs abroad. So, he'll embrace that fight.

The question for me, though, is it's not clear what the end game is with Canada. Fentanyl and border crossings are minuscule compared to those in Mexico.

Is Trump just going to embrace some kind of quasi deal like he did in his first term, and call it a big win? He's put himself out there, his credibility on the line, with his tariffs now. To walk back, it's going to make other partners like the E.U., for example, think, well, when Trump makes a tariff threat, it's just a bargaining chip, and it doesn't matter.

THOMPSON: What's interesting is that, you know, you said "The Wall Street Journal," the people that hollowed out the economy. But these tariffs are not targeted towards bringing back steel jobs or manufacturing jobs. They are very broad-based.

[06:10:07]

And they seem more designed to actually just bring in more tax revenue for his agenda rather than actually resuscitating and, you know, re -- you know, the Rust Belt.

HUNT: Yes. Because again, this is -- this is an area where Democrats and Republicans have been closer in recent years. Right? I mean, it's not as though President Biden got rid of all of the tariffs that Trump had imposed in his first term when he came into office.

But this, of course, just a new level. I guess it's going to be the imperial presidency. I think that's a phrase that is going to stick with us here for a while.

Ahead here on CNN THIS MORNING, call it a DOGE takeover. Elon Musk targeting the U.S. Agency for International Development, and his desire to, quote, "shut it down."

Plus, how Trump's moves in his opening days in the White House are reshaping presidential power. Former adviser to George W. Bush, Mark McKinnon, joins us live to discuss.

And tough questions. Thousands of FBI agents ordered to answer 12 questions about their role in the January 6th prosecutions.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They called the rioters "martyrs."

MCCONNELL: Yes, no, it was an insurrection.

Pardoning people who've been convicted is a mistake.

(END VIDEO CLIP)

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[06:15:35]

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TRUMP: The scales of justice will be rebalanced. The vicious, violent, and unfair weaponization of the Justice Department and our government will end.

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HUNT: The warning came on inauguration day. President Trump telling his supporters that his form of justice was coming. This morning we're getting a bigger, wider glance at what that looks like.

Thousands of FBI agents have been forced to fill out a DOJ questionnaire. The question is whether that signals another mass firing in the works.

Sources tell CNN that there are a dozen questions. They focus on January 6th cases.

This comes after more than a dozen DOJ officials who criminally investigated President Trump were fired. Former FBI deputy director Andrew McCabe, reacting to this latest action.

(BEGIN VIDEO CLIP)

MCCABE: Nowhere in my entire 21-year history in the FBI did I ever see anything like this, where employees are literally being rounded up for political reasons, for cases they did their lawful and expected work on. It's absolutely ridiculous.

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HUNT: The possibility that President Trump is widening his purge of the FBI comes as lawyers are pushing back threatening lawsuits and advising FBI agents to stand their ground and not resign.

Matt Gorman, there are, of course -- and Lindsey Graham made this distinction on the Sunday shows over the weekend -- there are differences between any political appointees at any agency in the government, or even top officials who may be civil service and every- day FBI agents who don't have a choice. Right? They're just assigned to investigate something.

Is this OK? GORMAN: The timing of this is what struck me, right? This is happening

after Kash Patel's confirmation hearing. So, he's not going to get questioned about it during the hearing.

And during that hearing, much like Hegseth, really, you could tell his talking points are very much based in the everyday FBI worker. For Hegseth, that was obviously the everyday serviceman or woman.

So, the timing of that was very interesting. If they did this two weeks before, this would obviously be a huge part of the hearings. Doing it afterwards shows that they were very cognizant to not let this be an issue during the hearings.

HUNT: Well, let's watch a little bit, like the key kind of line, I think, from that hearing, because again, this is a promise from Kash Patel, who's in line to be the next FBI director, under oath. Let's watch.

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KASH PATEL, NOMINEE FOR FBI DIRECTOR: Every FBI employee will be held to the absolute same standard, and no one will be terminated for case assignment.

All FBI employees will be protected against political retribution.

UNIDENTIFIED MALE: They deserve --

(END VIDEO CLIP)

HUNT: "All FBI employees will be protected against political retribution."

Is he violating that pledge?

GORMAN: Well, he hasn't taken office yet, so we'll see. We'll see what he does. We'll see what he does.

I mean, obviously, again, I think this was -- the timing of this was very important. That's what -- I took note of more than anything else.

HAYS: I mean, these FBI agents take an oath to the Constitution. They do not take an oath to a president. So, I think that this is going after them unnecessarily and unfairly.

Also, on January 6th, a bunch of people broke the law, and they were investigating it. So, let's not forget that.

But to be held accountable for something that you had no say in what you were doing is disgusting. And I think this is the definition of weaponizing the DOJ.

THOMPSON: I mean, Kash Patel did -- you know he has spoken to various right-wing podcasts that he's been on over the years, that he wanted to basically close down the FBI headquarters, get rid of a lot of the people there. And I think the timing here is like, to your point, interesting. It's

after the hearing before he's confirmed. He won't have his hands on this, but it will be interesting to see what he does with those questionnaires, if he is confirmed.

COLLINSON: Yes. If you're talking about getting rid of thousands of agents, I mean, that's a huge blow to the FBI. You know, they need these people for terrorism.

HUNT: So, we need the FBI.

COLLINSON: Yes.

HUNT: America needs the FBI.

COLLINSON: So, you know, the bureau isn't exactly renowned. The rank and file aren't exactly renowned for -- for being liberals. That's one question.

And the other issue here is, even if these people only get to answer the questionnaire, the messages have been sent that, in the future, investigating the president or anybody related to the president or the administration is not the right thing to do. So, the message will have been sent.

THOMPSON: The other context here is, you know, Trump believes the FBI hampered his first year as president in 2017, that James Comey did. And, you know, it led to the Russia investigation. That's the broader context.

HUNT: Yes. Well, let's keep in mind, I mean, Democrats haven't always loved the FBI either. Hillary Clinton was not exactly pleased with James Comey.

[06:20:04]

GORMAN: Yes. One thing that brings Democrats together is a hatred of James Comey. So, in this parallel -- polarized world.

HUNT: OK, coming up here on CNN THIS MORNING, Democrats in disarray. It's a cliche for a reason. Can a new leader of the DNC help the party develop a coherent message and counter President Trump?

Plus, a new weather threat facing millions of Californians. And we'll show you what happened on music's biggest night. Historic wins and fun surprises.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Quote, "Brat, you're just that girl who is a little messy and likes to party and maybe says some dumb things sometimes," end quote.

UNIDENTIFIED FEMALE: Oh, God.

(END VIDEO CLIP) (COMMERCIAL BREAK)

HUNT: All right. Welcome back. People in California just can't catch a break. There's more rain and potential flooding coming this way -- their way this week. Let's get to our meteorologist, Tyler Mauldin.

Ty, the weather guy. Good morning.

[06:25:03]

TYLER MAULDIN, CNN METEOROLOGIST: Hey, good morning, Kasie.

We have an atmospheric river setting up, impacting the West Coast. An atmospheric river is essentially a pipeline of moisture carrying with it heavy rain, snowfall and strong wind.

All of which we have coming and happening right now on the West Coast, specifically here in Northern California. We are looking at a level four out of five threat with this atmospheric river. We could see a couple of inches of rainfall across the lower levels.

And then as you go up into the mountains, heavy snowfall. What accompanies that is the potential for 65-mile-per-hour winds, maybe even stronger than that.

We have to watch the risk today and tomorrow for some flash flooding here. A level two risk for that.

And then you notice that we have millions under winter weather alerts stretching from California all the way into the Northern Rockies, where we could be measuring the snowfall in feet. Looking at the timing here, Kasie, you can see that this atmospheric river and the accompanying storms impacting the West continue to push eastbound as we go through time.

And by the time we do get to Wednesday afternoon, Los Angeles is picking up on the rainfall. So, more in the way of moisture heading to Southern California. That's good news.

Now, looking at the rest of the country, Kasie, you can see the Snow Belt will continue to see some snowfall there. And then, yes, even the Northeast will start seeing some snowfall, as well.

HUNT: All right. Tyler Mauldin for us this morning. Sir, very grateful to have you. Thank you so much.

And coming up here on CNN THIS MORNING, a presidential power grab as Donald Trump issuing executive orders designed to be challenged in court. Mark McKinnon joins us.

Plus, Elon Musk and DOGE getting heavy-handed with their cost-cutting and general approach.

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TRUMP: I think Elon's doing a good job. He's a big cost cutter. Sometimes we won't agree with it, and we'll not go where he wants to go.

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