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Trump's Trade Agenda; Harvard Gets Court Win; Public Reputation Boost with DEI; CEO Warns AI is Moving Fast. Aired 6:30-7a ET

Aired May 30, 2025 - 06:30   ET

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

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[06:32:32]

ERICA HILL, CNN ANCHOR: Good morning. I'm Erica Hill, in for Audie Cornish. Nice to have you with us this morning.

It is 6:32 on the dot right here on the East Coast. Here's a look at what's happening right now.

U.S. stock futures are pointing to a lower open after a federal appeals court restored President Trump's ability to levy tariffs. This comes after the Court of International Trade ruled he did not have the authority to impose those sweeping tariffs.

The president heading to Pennsylvania today to tout the deal that he announced between U.S. steel and Japanese steelmaker Nippon. President Trump has called this a planned partnership with the U.S. keeping control. Former President Biden had blocked the deal his last week in office.

Sean Combs' former personal assistant will be back on the stand this morning. She has been identified as Mia in an effort to protect her identity. She testified on Thursday about what she described as a chaotic, toxic work environment, alleging Diddy was violent with her and also sexually assaulted her.

All right, so the tariff whiplash, it's back. A lot of people feeling it. A lot of businesses. A lot of countries, frankly, feeling it right now. This after an appeals court ruled that President Trump's tariff policy can, in fact, stay in place for now, less than 24 hours, of course, after it was blocked.

We want to take a closer look, though, at the court that delivered that first blow. It's the Court of International Trade. On Wednesday, its panel of three judges ruled many of his sweeping tariff orders actually went beyond the powers of the president. So, it's time now to lawyer up with Elliot Williams, CNN legal analyst, former federal prosecutor.

So, we have this whiplash in the span of -- of less than 24 hours.

ELLIOT WILLIAMS, CNN LEGAL ANALYST: Yes.

HILL: What did we actually get, though, out of these two rulings, these -- that speaks to the legality of the tariffs?

WILLIAMS: Right. The big point here -- and you heard from the administration a lot, the courts are now micromanaging the decisions of -- of the administration, and that's not really true. What the Court of International Trade had said is that there might be a basis for tariffs. There are ways to go ahead and do this, Mr. President. However, the emergency authority on which the administration relied is not it.

Now, an appeals court, the court of appeals for the federal circuit, has put that on hold for now so both parties can write their briefs and -- and argue their case. But we haven't heard the end of this yet. But it's really just the basis for the tariffs, not the tariffs themselves.

HILL: You talk about too, the fact that the court --there are ways to do this legally. And we have heard that from some of the advisers, right? So --

WILLIAMS: Oh, the adviser -- the court said it.

HILL: Right.

WILLIAMS: They said (INAUDIBLE).

HILL: But, I mean, also from the Trump administration's point of view.

WILLIAMS: Yes.

HILL: We've heard it. You know, we heard Peter Navarro saying, you know, this is going to happen. We had Kevin Hassett talking yesterday as well.

[06:35:00]

The reality is, those other avenues exist, but they are much more of a heavy lift.

WILLIAMS: Yes.

HILL: And they may involve Congress. And they involve a lot of legal things you need to take care of.

WILLIAMS: (INAUDIBLE), Congress is the big one. You know, Congress and the Constitution has the authority to implement tariffs. Now, the president has some authority and some power to do things on an emergency basis, just not right here.

HILL: Let's also look at what's happening in Boston. So, you know, as commencement is getting underway. There was, of course, a court hearing just a few miles away in Boston related to Harvard. And just before that hearing started, the Trump administration said, oh, wait, Harvard, we're going to give you 30 days to figure this out. Was this really just sort of a last-ditch effort to delay?

WILLIAMS: Absolutely -- and quite possibly. And all many watchers of this -- first of all, I have to correct you, it's Cambridge not --

HILL: Pardon me. Yes. They were -- oh, as someone who went to school in Boston and remembers Harvard as the only school that wouldn't share their books --

WILLIAMS: Yes.

HILL: I know it's Cambridge. Don't worry.

WILLIAMS: As someone who went to Penn and Columbia, and my wife went to Yale also, it is with some disdain that I say Cambridge.

HILL: Right.

WILLIAMS: However -- but, no.

However, it's really just -- in the guise of giving more time to negotiate to the parties, everybody who's looked at this, or many who have looked at it have said, I think the administration's probably just trying to stall here, to -- to stretch this out as long as they have, because it's a political winner for them, fighting with Harvard.

HILL: It's a political winner, but does it also show that there may be some concerns on the part of the administration about whether it's a legal winner?

WILLIAMS: Well, yes, and they're -- they do not have a great legal case here, both in terms of meddling in the free -- free enterprise of private entities hiring and firing decisions and so on, but also free speech. There are serious questions about whether they are stepping on Harvard's ability and students' and faculties ability to speak freely or to -- to engage in conduct in the classroom that is protected under the Constitution.

HILL: This has kept you fairly busy the last several months, right?

WILLIAMS: It has.

HILL: As we look at this flood of activity in the courts, where does the Trump administration stand at this point?

WILLIAMS: It stands -- those are two different questions, right? It's, politically, they're doing great. Now, legally in the courts, not so well. Now often it's important to note what is winning and what is losing. And nobody's won anything until the Supreme Court has either ruled on something or decided that they're not going to. Most of these rulings we've seen, and there have been hundreds of them at this point, have really been temporary or preliminary ones at the beginning.

And there's been a lot of them, far more than any of us have seen in any of our -- of our times here. But many of these cases are not on -- on great legal footing. It's just that they're politically popular with many people and the action taken that got us there actually caused some harm that can't be undone. So, yes, maybe they lose one day, but some of the damage has been done. HILL: But the damage has been done.

WILLIAMS: Yes.

HILL: The most important case probably this week that both you and I were watching very closely involves Flamin Hot Cheetos.

WILLIAMS: Yes. And I will note, I probably spent more time researching this issue, Flamin Hot Cheetos, than any of the others, because I realized, Erica, I know far more about the Court of International Trade than I do about how Cheetos are made. And that led to some search -- who am I? Am I who I want to be?

HILL: It sort of pains you a little bit, right?

WILLIAMS: It does. Well --

HILL: Yes, where are your priorities?

WILLIAMS: No. This is not where I wanted to be at age 49. So, yes, Flamin Hot Cheetos. So -- oh, go ahead.

HILL: No, I was saying, no, go ahead. So, this is -- this is actually a defamation suit that was brought.

WILLIAMS: A defamation suits. A man claims that he -- a former janitor claims that he came up with the recipe for Flamin Hot Cheetos. There's actually a movie, a biopic made about this individual.

Now, Cheetos has said and maintained that, no, we came up with this on our own and that this is sort of a manufactured thing. Not Flamin Hot at all.

HILL: And has been very successful for the company, we should point out.

WILLIAMS: That has -- wildly successful. Now, he -- what -- what happened was, it's a fascinating story. A Cheeto machine broke and he had unflavored Cheetos, which, OK, strike one right there.

HILL: Yes.

WILLIAMS: Lord knows --

HILL: That's why we want the machine to work.

WILLIAMS: We've -- we've all put bad things in our mouth. Like -- but an unflavored Cheeto is pretty dark.

So, he gets unflavored Cheetos, takes them home, puts elote on them, and says, I came up with Flamin Hot Cheetos. They then for years have asserted that, no, we came up with the recipe. He sues them. He ends up becoming an executive, sues them for defamation. That just got thrown out.

HILL: Yes. WILLIAMS: Saying that they had a right to say that this was their trademark. This is how they were created. He can file this suit later at one point. But, sadly, you know, he's not going to become the Cheeto heir or the Cheeto empasari (ph).

HILL: The Flamin Hot Cheeto king or the whatever it may have been.

WILLIAMS: Flamin Hot -- that was actually my nickname in college, believe it or not.

HILL: Flamin Hot Cheeto king?

WILLIAMS: Yes. Yes.

HILL: It's really unfortunate that we're out of time, because I would like to unpack that.

WILLIAMS: Ladies and gentlemen, it was not, in fact, my nickname in college. I --

HILL: Spoiler alert.

WILLIAMS: Spoiler alert.

HILL: Spoiler alert.

Always a pleasure, my friend. Nice to see you in person.

WILLIAMS: Thank you, Erica. Talk to you soon.

HILL: Thank you.

WILLIAMS: Thank you.

HILL: Well, as a federal judge said she would block the White House from ending Harvard's ability to enroll international students, just down the road, in Cambridge, the fight with the White House was top of mind as the school held its commencement ceremony.

CNN's Leigh Waldman has more.

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LEIGH WALDMAN, CNN CORRESPONDENT (voice over): A major win for Harvard University as the judge overseeing the international student case says she will order the Department of Homeland Security and State Department to not make any changes to Harvard's student visa program indefinitely.

[06:40:01]

ALAN GARBER, PRESIDENT, HARVARD UNIVERSITY: Members of the class of 2025, from down the street, across the country, and around the world -- around the world, just as it should be.

WALDMAN (voice over): That ruling coming as the nation's oldest university holds its 374th commencement.

UNIDENTIFIED MALE: We leave a much different campus than the one we entered.

WALDMAN (voice over): Prior to the judge's ruling, fears were swirling for the future of Harvard's current and future international students.

UNIDENTIFIED MALE: Many people are looking at perhaps a gap here or any other alternatives, which, again, none of them sound as -- as good as continuing their education within the university they put in so much effort to get into.

WALDMAN (voice over): President Donald Trump, Wednesday, telling the Ivy League to behave.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Harvard is treating our country with great disrespect, and all they're doing is getting in deeper and deeper and deeper.

WALDMAN (voice over): In addition to the foreign student fight, the university is also challenging the White House in court over the freeze of $2.2 billion in federal money after it refused to take steps like eliminating diversity, equity, inclusion programs and admission changes.

I'm Leigh Waldman, reporting.

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HILL: Well, with the push to do away with DEI, a new poll finds these policies actually really matter to a number of shoppers, including to the "Axios"/Harris poll. Companies that maintain their DEI commitments saw a boost in their public reputation compared to those that didn't. Patagonia, Microsoft and Costco among the top rankings there.

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UNIDENTIFIED FEMALE: DEI wins and remains one because I spent $980 at Costco today.

Going to support the only store I can support anymore, which is Costco.

Don't forget, Costco loves DEI, so we love Costco.

(END VIDEO CLIP)

HILL: Meantime, of course, over at Target, its CEO said the stores were really facing some issues and some of the problems in response, of course, to their DEI changes. We all recall the boycott.

So, what does this mean for businesses moving forward?

The group chat is back.

As we look at this, I'm fascinated. The "Axios"/Harris poll, Sara Fischer from "Axios," so I'll throw it to you first, it is really interesting to see the public backlash. So, a number of companies have pulled, even if they haven't maybe changed the way they do things internally, they're not broadcasting it on their websites, for example, but it matters to consumers.

SARA FISCHER, CNN MEDIA ANALYST: Yes, Erica, I've been managing this poll for "Axios" since 2019. There's one through line every single year, which is that, as a company, consumers want you to stand up for the policies and the principles that you've always stood for. When you go out of line, that's when you get hit. So, if you are trying to do something to pander to the political climate, consumers do not like that. If you've always stood for DEI, if you've always stood for the environment, and you continue to serve those missions, nobody's going to punish you for it. That's why companies like Patagonia and Hobby Lobby are always at the top of our list, because they are consistent in their beliefs, regardless of their political party.

It's when you have a perspective and you decide to change that perspective because you want to curry favor with some sort of administration, consumers really react negatively to that.

HILL: And when we look at this in terms of that shifting, you know, the shifting priorities, if you will, shifting public stance, there is -- you cannot ignore the present -- the pressure, rather, from the current administration. So, the fact that some companies are ignoring that, do they do it at their own peril when it comes to potential regulations?

ROB BLUEY, PRESIDENT AND EXECUTIVE EDITOR, "THE DAILY SIGNAL": Well, certainly I believe that DEI is inconsistent with American values. And so, I -- I like, particularly as -- as Sara articulated, those companies that -- that shy away from it. As -- as she said, though, there are some, Target being an example, where conservatives, myself included, stopped shopping there because of their policies. Now, that's the consumers' choice. Those companies need to decide who they are trying to appeal to. And if they're out of step, as Sara indicated, that's when they fall into trouble.

As it pertains to Trump and his -- his approach, it's not just the administration. There are a lot of groups now doing shareholder resolutions and other things that are forcing these companies to make tough choices when it comes to the policies they pursue.

HILL: But some of those choices are sticking with what works for the company and what they believe as a company, which is, we do better when we have a workforce that looks like the country that is more inclusive, that is more diverse, that is more equitable, which we saw in that poll.

LULU GARCIA-NAVARRO, CNN CONTRIBUTOR: Yes. I think one of the things that is really interesting is that companies are now trying to hide what they're doing. They're using other language. So, instead of having DEI officers, they're using all these other words to sort of mask it.

At the end of the day, though, the bigger picture is that this is now different than what happened before. This is not about backlash. This is actually about federal rulings, you know, federal interference in these companies and what they're doing. And so that really does look a lot different than what we saw, you know, in 2020 and beyond, where there was a lot of turmoil, a lot of consumer angst about what companies were or were not doing.

[06:45:01]

This is now something that is coming from the federal level. And so, I do think that that really does change the game.

HILL: It changes the game. It's also fascinating to me, as you point out, right, like the language is changing. Maybe what we call the office is changing. The policies are not necessarily changing.

How does that play out, though, as -- as you're following this, right, and as you've been tracking it and looking at polling like this, how much do the words matter to people versus the deeds?

FISCHER: Great question. There's two constituencies that a company has to worry about, internally, their employees, which if you're a big company, you've got tens of thousands of employees. It matters a lot what type of wording you're using because they have been so accustomed to these policies throughout their years and tenure working there. If you are an external stakeholder, if you're a consumer, the minutia is not as big of a deal. But if it gets broadcast, if you get called out by the president, if you get called out by somebody for making a change, that's when it becomes a very, very explosive problem.

The -- to Lulu's point on the regulatory side of things, one thing I'm following, you have right now the FCC probing a lot of media companies for their DEI policies. So now suddenly these companies are under pressure, not from their employees, not from their constituents or their, you know, viewers or the consumers, but they want to get their deals approved. They want to get things done with government mergers and acquisitions. They are now suddenly changing their DEI tune to make sure they're currying favor with the administration.

To Lulu's point, that is very different. This is not a pressure coming from like the George Floyd swirl from society. It's coming from the government. It's a very different type of pressure point for companies.

GARCIA-NAVARRO: And I think it should worry people. I mean, I think it should worry people because, you know, when you have the federal government trying to take private companies to task for policies that they're implementing, whether you think they are un-American or not, we can, you know, one can argue that until you're blue in the face. But what is the role of the federal government in actually punishing companies for policies that they're holding about, you know, how they choose to hire people? And so that becomes, I think, the bigger question under which all of this sits. This is a different era.

BLUEY: If those policies, though, are discriminatory in the view of the Trump administration, that is an area where I do believe that they think that they have a right to insert themselves and challenge some of these companies.

FISCHER: That's where it goes to the courts, because you have the companies who are going to argue a First Amendment infringement, and then you can say, on the other side of it, well, there's discriminatory action. I think a lot of these types of challenges and these conflicts will end up in courts.

HILL: Like a lot of other things we're following.

FISCHER: Yes. Yes.

HILL: A lot of time in the courts.

All right, group chat, stick around. Much more ahead here.

Coming up on CNN THIS MORNING, is AI on the brink of sending the unemployment rate to 20 percent? What one AI CEO is now saying about the rapid rise of the industry. That's just ahead.

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[06:51:54]

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DARIO AMODEI, CEO, ANTHROPIC: These technology changes have happened before, but I think what is striking to me about this -- this AI boom is that it's bigger and it's broader and it's moving faster than anything has before.

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HILL: That is the CEO of one of the world's leading artificial intelligence labs. He says AI could cause, in his view, a massive spike in unemployment.

Just this week, of course, he warned the AI models his company and others are building are progressing, in fact, so quickly they could wipe out half of entry level white collar jobs in a matter of a few years. So your jobs like paralegals, administrative assistants, payroll clerks, even some postal workers. He says that could spike the unemployment rate to 20 percent.

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DARIO AMODEI, CEO, ANTHROPIC: I think it's eerie the extent to which the broader public and -- and politicians, legislators, I don't think are fully aware of what's going on. A few of them are. But I think, for the most part, they don't really see what's coming.

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HILL: Joining me now to discuss, CNN business writer Clare Duffy.

Clare, so this, obviously, generating a lot of attention, these headlines really alarming to a number of people. What has been the reaction, though, in the broader industry in terms of how many people are actually on board with this warning from Anthropic's CEO? Do they believe he's right?

CLARE DUFFY, CNN BUSINESS WRITER: Yes, Erica, I mean, people have sort of a range of predictions about how quickly this is going to happen, how quickly we really could see AI replacing half of all entry-level white-collar jobs. But everybody is sort of on the same page, that this is going to happen at some point. And I think what we're hearing from Dario Amodei there is that we need to be moving quicker to react to this and to respond to this and to find a way to structure society such that we could handle 20 percent unemployment in the next one to five years.

Just to put that in perspective, that could mean unemployment essentially going up five times in the next few years. And he had a number of sort of suggestions, especially for lawmakers in terms of how to handle this, including potentially taxing AI companies.

Here's what he said about that.

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DARIO AMODEI, CEO, ANTHROPIC: I wouldn't exclude the notion of, you know, levying a tax on AI companies, right? If AI creates huge total wealth, you know, a lot of that will -- will by default go to the AI companies and -- and, you know, less to ordinary people. And so, you know, definitely not in my economic interest to say that, but I think -- I think this is something we should consider. And, you know, I think it shouldn't be a partisan thing. You know, again, if these issues are big enough, they -- they affect everyone.

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DUFFY: But, Erica, look, I think it's also worth mentioning the fact that this is a company that just released an AI model that it says can work seven hours on its own with very little human intervention and do really complex tasks. So, he's making this warning at the same time that his company is selling the technology that could be replacing human workers.

HILL: Right. And that's part of the pushback, right? Our colleague Allison Morrow even writing over at CNN Business, these "warnings feel more like an ad than a PSA" for his company, saying, it's now "on them to show their work: show us how AI could be so destructive and how Anthropic can fix it, rather than just shouting about the risks."

What more is there beyond that suggestion of, you know, maybe taxing AI that he had in terms of how to fix it?

DUFFY: Yes, I mean, I think that's right. He, you know, even told our Anderson Cooper last night that one of the ways that people can respond to this is by learning to use AI, which does sort of sound like an advertisement for his company.

[06:55:06] I also think it's sort of interesting timing because this is, you know, the major AI labs are also locked in a race, not just to have the most powerful technology, but also to be the most trusted, most responsible stewards for this technology transformation. They want to be the ones that lawmakers are turning to for advice on how to handle this.

So, I also think this may be a bit of reputation management on the part of Dario Amodei by making these comments at this point.

HILL: Clare Duffy, great to see you this morning. Thank you.

Well, in just a few hours, Elon Musk is set to officially exit his role in the Trump administration, leaving behind his DOGE work in D.C. This afternoon, President Trump is hosting Musk for one final press appearance at the White House. The president says it will be his last day, but not really, because he will always be with us.

So, what about Elon Musk and his criticism of that big, beautiful bill passed by Republicans? Vice President Vance doesn't seem too concerned.

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J.D. VANCE, VICE PRESIDENT OF THE UNITED STATES: Elon's become a very good friend, really over the campaign and certainly over his -- his time in Washington. I mean, you know, he and his kids have come over to our house and, you know, had dinner with our kids. So, I'm very close to him.

I think Elon's entitled to have his opinions about the function of government. I still think the big, beautiful bill is the way to go.

(END VIDEO CLIP)

HILL: The group chat is back.

How much damage did Elon Musk do to himself with his comments about the big, beautiful bill? If any.

BLUEY: Well, let's face it, there are a lot of Senate conservatives who want to see changes to the big beautiful bill as well. More spending cuts and other reforms that the House didn't make. And so, I think that there's room to do that.

I think one of the most important things that members of Congress can do to make sure that Elon Musk's work with DOGE does not go to waste is to codify a lot of those cuts in a rescission package that's coming to Congress soon.

GARCIA-NAVARRO: Can I just be honest.

HILL: Please be honest.

GARCIA-NAVARRO: Elon Musk made those comments, I think, because he believes them, but also because he is on his own press tour to try and save himself from his own reputational damage because Americans found what he did very, very unnerving. They didn't like it. And he is very unpopular. It's hurt his core businesses, which he's now going back to. He's been on a press tour trying to really remediate this. So, part of that is to show some separation between him and the administration that he has been so closely tied to.

HILL: What are you watching for today when we see these two together again?

FISCHER: I think you're going to see a very friendly departure here. Donald Trump needs Elon Musk. Elon Musk controls one of the most powerful social discourse platforms in the world. And underneath Musk, it's been very positive for conservatives. So, I don't think you're going to see much tension. I think you're going to see a very positive sendoff, if I'm being quite honest.

HILL: A little bro-fest happening.

FISCHER: Yes.

HILL: Ah, the bro-fest is back.

All right, before I let you go, a quick talk about what you're all keeping an eye on today. I'll start on this side.

FISCHER: Yes. So, there is a big lawsuit right now between Paramount, which is the parent company to CBS News, and Donald Trump. The lawsuit that Donald Trump waged against Paramount last year was over an interview that he alleged is, you know, sort of alleged amounts to voter fraud because they -- he says it boosted Kamala Harris. But if CBS settles, which is something that I'm watching for in the next few days or weeks, it will have enormous repercussions. The press freedom community says that it would be a sham to press freedom if they settle.

HILL: Yes. There is a -- there are a lot of eyes on that. Mine as well, Sara. What are you looking for today (ph)?

BLUEY: Sure. Well, Erica, we -- after President Trump is finished with Elon Musk, he'll board a plane and go to a suburb of Pittsburgh, Pennsylvania, where last week he announced the big deal with U.S. Steel. And this is transformational in many respects. Salena Zito calls it a game changer for that community there. U.S. Steels' headquarters will stay in Pittsburgh. And of course, we know how important politically Pennsylvania is for Republicans and their future.

GARCIA-NAVARRO: I have been looking at Donald Trump and his Truth Social feed, which overnight he went after a kind of unexpected target, someone that he actually owes a lot to, who is Leonard Leo of the Federalist Society. If you know what the Federalist Society is, it's been the architect of really pushing a very conservative, judicial agenda. He is seen as the person who was able to really get the Supreme Court to be where it is now, six to three conservatives. And so, he went after him, which just shows that Donald Trump really holds no one sacred. And basically said that he blames the Federalist Society and Leonard Leo for a lot of the problems with the judicial branch right now.

HILL: He's complaining about the list that he had been given, right?

GARCIA-NAVARRO: Yes.

HILL: And this comes as he's also complaining about one of the judges on the international trade court, right, because this was a unanimous three judge ruling, one of whom, though, was appointed by Donald Trump. And he asked, who put these guys there? Yes.

GARCIA-NAVARRO: And it was him.

HILL: Yes, for one of them at least.

Great to always -- I'm going to be watching a big basketball game because I live in New York, but I am in a house full of Pacers fans. And so, I went to bed before it ended last night.

GARCIA-NAVARRO: Wow.

HILL: But there's going to be a lot happening come game six. So, I'm watching that. There you go.

BLUEY: Yes. NBA playoffs. NHL Stanley Cup. I mean there's a lot --

HILL: It's a good time of year for sports, right?

BLUEY: That's -- that's right.

[07:00:00]

HILL: Plus, the Tony Awards are coming up. There's a lot of things happening.

GARCIA-NAVARRO: Yay.

HILL: Nice to be with all of you this morning. Thanks for -- thanks for having me here in D.C.

That's going to do it for the group chat and for CNN THIS MORNING. Thanks so much to all of you for joining us. I'm Erica Hill, in for Audie Cornish. "CNN NEWS CENTRAL" starts right now. Have a great weekend.