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Ukraine Hits Crimea Bridge with Underwater Explosives; Ukraine "Spiderweb" Operation Hit 41 Russian Aircraft; Trump: Deal will "Not Allow Any Enrichment of Uranium"; New Tariffs on Steel & Aluminium Drive Stock Market Moves. Aired 9-10a ET

Aired June 03, 2025 - 09:00   ET

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

[09:00:00]

(COMMERCIAL BREAK)

ELENI GIOKOS, CNN HOST, CONNECT THE WORLD: This is the scene in Khan Yunis, where at least 27 people have been killed and dozens wounded after the

Israeli military opened fire near Palestinian aid distribution for a third consecutive day. It is 04:00 p.m. in Gaza, it is 05:00 p.m. here in Abu

Dhabi. I'm Eleni Giokos. This is "Connect the World".

Also coming up on the show, Ukraine says it has struck the bridge connecting Russia to Crimea with underwater explosives just days after a

daring air raid deep inside Russia. And nuclear talks between Washington and Tehran seem destined to stall as U.S. President demands a complete ban

on uranium enrichment.

Right, markets in the United States will open in around 30 minutes. Let's check in on those futures. The DOW and S&P are in negative territory, and

the NASDAQ just moved into red as well. Behind this is a lot of uncertainty with regards to tariffs. The OECD today downgrading U.S. growth outlook for

2025 to 1.6 percent from the previous 2.2 percent.

The reason, well, it's tariffs and uncertainty that has been injecting into global growth that has also been downgraded and of course, affecting

markets across the board. Right, breaking news this hour, Ukraine says it has hit the Crimea bridge in an underwater attack. We show you this video,

which was posted by Ukraine's intelligence agency, showing the moment the bombs went off.

While this is the third time Ukraine has hit the 12-mile bridge that's connecting occupied Crimea to mainland Russia since the war began. Ukraine

is describing it as a new type of operation. We've got CNN's International Diplomatic Editor, Nic Robertson in London for us.

And Nic, we're watching this video. You can see those underwater bombs going off. I firstly want to talk about the damage we're seeing on the

Crimea bridge. It's clearly very strategic for Russia. Tell me what we know.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yeah, as Ukrainians say, it's the third time they've tried to target the bridge, and this time

they've gone for one of the sorts of vertical concrete pillars that holds the bridge above the water, 35 meters above the water, 9 meters of water.

It's not clear how deep, if it was at the base.

There's a lot of silt at the base of the Kerch Strait there. The this underneath the Crimea bridge. So, this explosion, the Ukrainians are

saying, involved 1100 pounds of TNT equivalent. That is a pretty massive explosion. We've just been able to see some video shot from a distance from

the bridge.

And you really can see a huge plume of smoke water rising up next the bridge, but it's not quite clear what has actually been damaged, the

lasting damage, the impact of all of this. It's important for Ukraine to target, because it connects mainland Russia with annex Crimea.

Now, since Russia began that invasion in 2022, they've taken essentially a land corridor, a land bridge that links mainland Russia to Crimea, but when

they annexed it in 2014, they had nothing linking it but a ferry. So high speed effort, four years later, they built these 12 miles long, estimated

$3 billion rail and road bridge to link mainland Russia with Crimea and Russia uses it to resupply and stock munitions closer to the front line in

Crimea.

And Crimea is also an important naval base for the Russian military as well. So strategically, hugely important. And as we've seen, Ukraine is

really going after high value targets these strategic bombers over the weekend, hitting a significant number of those are now targeting this

bridge again and indicating the SBU, indicating that this is not one and done, that there may be others to follow the first explosion of this type.

And I think you know, just as we're sort of looking at how Ukraine is trying to blow up this bridge. The two previous attempts were different.

One, 2022 the explosion seemed to be much more at road level. An explosive place just under the road level disabled the road for a period of time.

And then the other -- the other one, again innovative in 2023, these baby sea drones, as they were called at the time, water borne drones, innovative

effort by the Ukrainians to hit the bridge at water level. And that's why the Ukrainians this time are saying this is an underwater attack.

This is what makes it different. And of course, with so many stanchions under that bridge, the Russians have got quite a job on their hands now to

see if Russia -- if Ukraine is actually putting out accurate information that there may be more explosives underneath some of the other pillars.

[09:05:00]

GIOKOS: I also want to talk about Ukraine striking Zaporizhzhia and Kherson and leaving people without electricity. This is within Ukrainian --

Ukraine, but it's Russian held territory. Keeping in mind that we saw a sophisticated attack deep within Russia yesterday, the assault seems to be

quite aggressive right now, from the Ukrainian side.

Tell me what we're seeing in Russian held territory right now, and the significance of this Nic.

ROBERTSON: The significance appears to be, you know, when you're cutting off electricity, it's demoralizing to the Russian forces there. You know,

one of the reasons Ukraine has sort of held back from doing this sort of attack on its own territory, albeit effectively annexed and controlled by

Russian forces, in part in Zaporizhzhia, in part in Kherson, is because there are Ukrainians living there too.

But this does seem to be the Ukrainians trying to take the fight to the Russians in a way that undermines Russia's war fighting abilities. Ukraine

is taking some losses at the front. We have seen Sumy in the north, the town there be heavily hit and targeted again in the city center, according

to Ukrainian city officials in Sumy, right into the city center, missiles landing in the city center.

So, there's pressure coming on Ukrainian forces by, if you will, Russia's, you know, if you want to call it standard military tactics of hammer and

grind away at the front hits. It is just behind the front line, whereas Ukraine is trying to sort of hit in a precision way, potentially because

that they view as the best use of the weapons and munitions that they have at their disposal, and that does seem to include hitting the electricity or

taking down the electricity supplies in Zaporizhzhia and in Kherson.

GIOKOS: All right. Nic Robertson, thank you so much for that update. I want to bring in Military Analyst Cedric Leighton, who's joining us live from

Washington, D.C. Cedric, always good to have you on, especially when we're just seeing so much news coming through.

I want to talk about there's so much that's happened Ukraine striking the Crimea bridge with these underwater explosives. This is after striking

Zaporizhzhia, Kherson. We saw what happened deep within Russia. How are you reading into these attacks, and is it making a big difference in terms of

the calculus and the strength of Ukraine right now that has clearly been on the back foot for quite some time.

COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST: Yeah. Eleni, great to be with you again. The big thing that the Ukrainians are trying to do is

basically what Nic, pointed out, and that is hit strategically important targets. And so, when you see what they're doing, you go through every

single aspect.

There's a lot of planning that's involved in what the Ukrainians have been doing, and that planning seems to indicate that they're looking at the most

effects that they can achieve. So, when you look at what's happening with the bridge, the Kerch bridge, which is a strategically important, vital

link between Russia proper and Crimea.

They are basically saying, the Ukrainians are saying that this is the place where they are going to, in essence, take a stand. They don't have the

manpower to reoccupy Crimea, but they will make it as miserable as possible for the Russians who are occupying Crimea.

And that is one of the ways to do that is to cut off the supplies, make the bridge basically unusable. It's both a rail and a road bridge, and that

bridge is basically the one that is such a prestige project for the Russian Federation. Putin himself was there at the opening of the bridge, and he

was there at the reopening of the bridge.

So that's the kind of thing that they understand, the Ukrainians understand that the Russians have these prestige projects, and they are very much

interested in damaging those prestige projects, and the Kerch bridge is basically at the top of that list. And then if you move on to what has

happened with the bomber fleet and the other airplane involved with everything that was happening on Sunday.

You see that there are so many different targets sets that the Ukrainians were able to, in essence, prosecute and using that kind of as a military

term, which basically means that they went after these targets. So, when they went after these targets, they were sending a message, it's a risky

operation, both operationally and politically as well as obviously diplomatically.

But the operation that they engaged in is one in which they sent a clear message that everything that the Russians have their most valuable assets,

that all of that is potentially at risk from Ukrainian unconventional attacks. And that is something that could potentially be a game changer for

Ukrainians.

[09:10:00]

GIOKOS: And that's rightly so. I mean, you know, it's also showing vulnerabilities on the Russian side, where the Ukrainians were able to go

so deep within Russia on this COVID attack, which clearly was successful. We've also heard Zelenskyy explaining the logic behind this. Cedric, I want

you to listen to what he said.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, PRESIDENT OF UKRAINE: We don't want to demonstrate our strength. We are demonstrating it because the enemy doesn't want to stop.

We demonstrate it in a fair way on military targets, and we don't only demonstrate it to the Russian aggressors, but also to all those allies that

once were strong allies and have now started doubting us. The trust towards Ukrainians and faith in Ukraine has returned.

(END VIDEO CLIP)

GIOKOS: So OK, so that's the theory that's Zelenskyy is thinking. But does it give Ukraine an advantage? Because there's a difference between what

we're seeing on the front lines and then these precision attacks.

LEIGHTON: Yeah, there definitely is a difference. So, when people see attacks like this, this is basically, in addition to being a military war

and military campaign, it is also a PR campaign, and it's very essential for the Ukrainians to basically bring their allies back, you know, convince

people in the United States that Ukraine is worth fighting for.

Same in Western Europe, making sure that each of these allies of Ukraine, as Zelenskyy has called them, that they truly stand with Ukraine. And it is

these kinds of attacks, these basically sensational attacks, that really show that the Ukrainians have capabilities that, in essence, belie what is

happening on the front lines.

The front lines, they're not collapsing, but there are definitely pressures on the front lines, and it's very difficult for the Ukrainians, just by

sheer numbers of personnel, the difference, you know, between the Russian forces and the Ukrainian forces in terms of numbers and in terms of

equipment and just in terms of volume, what the Ukrainians are doing is they're relying on precision, as Zelenskyy mentioned, and that precision

does several things.

First of all, it shows that the Ukrainians are using intelligence very precisely. They are not using the old Russian or Soviet method of going

after a target with mass with lots of military forces, with lots of weapons, with lots of artillery. They're basically modernizing what the

approach is on the Ukrainian side, and that means less indiscriminate killing when it comes to civilian targets. Basically, the Ukrainians try

very hard not to hit civilian targets.

GIOKOS: Yeah.

LEIGHTON: The Russians don't care, and that's a big difference between them, and that helps the Ukrainians, from a PR standpoint, especially in

the west.

GIOKOS: Yeah. Look, we know that peace talks are meant to be underway as well. We're not sure who's going to walk in with a strong -- sort of strong

argument in the room, but I want to talk about drones because Ukraine has strengthened its value chain of drone manufacturing.

In fact, President Zelenskyy said the target for drones in 2025 is around 4.5 million. Comparison, Russia estimated drone manufacturing are 2.2 to 3

million in the same year. That's according to Forbes. How is drone warfare altering what we're seeing between Russia and Ukraine?

LEIGHTON: Well, one of the things that it's doing, Eleni, is it's changing the dynamics of the battlefield. So, you know, when you take a look at what

the Ukrainians were able to do against Russians manned aircraft, but they were on the ground, so they attacked them at their most vulnerable point.

In that sense, comparable to what the Japanese did against the U.S. and Pearl Harbor in 1941 to start our entry, the U.S. entry into World War Two.

And that kind of thing is a basically asymmetric aspect. And the drones, I you know, that's a sensational use of the drones.

But one of the key things that the Ukrainians started doing when the war first started, or this phase of the war first started, was to use these

drones as first intelligence gatherers, and then they realized that they could weaponize them more or less on mass. So, what they are doing is

they're in essence, creating what in the U.S. we call network centric warfare, and they're using data links.

They're using communication links to automate the war process. So, it's not just drones, but it's the use of artificial intelligence. It's the use of

commercially available intelligence products such as satellite imagery, and it's fusing all of this together in a very unique way that is, in essence,

changing the dynamics of war.

And what it means is that countries that are perceived to have minimal power can now actually stave off invasions by much larger conventional

powers.

[09:15:00]

And that is something that you know will be part of the questioning that has to the soul searching that has to go on in the entire world of defense

on all sides of that, whether it's in the west or in Russia or in China.

GIOKOS: Yeah.

LEIGHTON: This means that the dynamics of the battlefield are changing,

GIOKOS: Rightly so, Cedric Leighton, always good to have you on. Thank you so much, sir for your insights. I want to go now to the region that we're

in and we're seeing and we're covering a third day of deadly gunfire near an aid center in Southern Gaza. A warning now the videos that you are about

to see are disturbing.

The Palestinian Health Ministry says at least 27 people have been killed and dozens wounded in today's shooting incidents. Now that is the third in

a row. The Israeli military says it opened fire after people were quote moving toward them. The video shows people arriving at Nasser Hospital in

Khan Yunis earlier.

Now, Gaza officials tell us the hospital has been overwhelmed by the number of casualties coming in, and today's gunfire erupted west of Rafah, near

the same location as the fatal shootings of the past two days. I want to bring in CNN Jeremy Diamond, live from Jerusalem.

Jeremy, these are very harrowing pictures. And you know, the whole question of the way that aid is being distributed and the mechanism has come into

question. It's been highly criticized, but for many watching these images, when people are trying to get aid, it looks like it's going to be a death

trap. So, give me a sense of what the IDF response has been and the reason behind these shootings.

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Yeah, Eleni, this is the third day in a row now that Palestinians have been shot as they were trying to

make their way to this controversial U.S. and Israeli backed Gaza Humanitarian Foundation, aid site in southern Gaza.

Today proved to be an especially deadly day, with at least 27 Palestinians who were killed and dozens more injured, according to the Palestinian

Ministry of Health, that is a similar death toll to what we saw on Sunday. Today, the Israeli military indeed acknowledging that they did open fire on

what they describe as, quote, several suspects who were moving toward them.

We know that on Sunday, the Israeli military issued this denial, claiming they didn't fire near an aid site. But at the same time, an Israeli

military official did acknowledge to us that they did fire on people about one kilometer away from that aid site, which is where Sunday's shooting

did, in fact, take place.

And so, what we are seeing are very similar scenes today to what we saw on Sunday, where a number of Palestinians were mourning their family members

who were simply trying to get aid to survive. Here is the brother of one- man Hussam Wafi who is doing just that.

(BEGIN VIDEO CLIP)

ALI WAFI, HUSSAM WAFI'S BROTHER: The U.S. and Israel what do they tell us, go and get your food and water and the aid. When the aid arrives, they hit

us. Is this fair? Is this fair, death? Those who go to get food from their die. Yesterday, 35 martyrs were brought to the hospital.

From where, from where they went to get food. They were not going for fun. They were going to get food and drinks. This is the injustice that we are

in.

(END VIDEO CLIP)

DIAMOND: And today, the Gaza Humanitarian Foundation indeed acknowledging that there is this shooting incident that took place outside of its area.

They say that this is an area, quote, well beyond our secure distribution site and control. And they noted that the Israeli military is looking into

it.

But we should be very clear, Eleni, that these thousands of people, whether they are a half a kilometer or a kilometer away from this aid distribution

site, the only reason that they are on that route is in order to reach that distribution site, and that is obviously exactly what humanitarian aid

officials have been warning about and why they refuse to participate in this mechanism.

GIOKOS: All right. Jeremy Diamond, thanks so much for bringing us that update. It's not looking good for U.S. nuclear talks with Iran. One Iranian

official describing the latest proposal with words like incoherent and disjointed. We'll find out where things stand right off in a short break.

Stick with CNN.

(COMMERCIAL BREAK)

[09:20:00]

GIOKOS: Welcome back. Optimism seems to be fading fast regarding the United States nuclear talks with Iran. The U.S. has wavered on the issue of

nuclear enrichment, but President Donald Trump was emphatic on social media, saying a new deal on Iran's nuclear program would not allow any

enrichment of uranium.

Senior International Correspondent Fred Pleitgen is tracking the talks from Berlin for us, clearly a red line in terms of any uranium enrichment. The

Iranians want some kind of enrichment they're saying for domestic and electricity use. Where's this all going to end?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, that's the compromise that both sides still need to try and find somehow. But

certainly, as far as far as this first proposal that was put forward by the United States and handed over to the Iranians by the Omanis this week.

It certainly doesn't seem as though there's much in the way of optimism. And it was that senior Iranian official, Eleni, who told me that the

proposal that is on the table right now, it was put forward by the Americans, seems pretty unacceptable for the Iranians at this point in

time.

He did use those words incoherent and disjointed. And there's essentially two things that this official says that the Iranians have issues with. The

one thing is the sort of mixed messages that they're feeling that they've been getting from the Trump Administration, that one thing they believe is

being said at these meetings that, of course, are led by the president's negotiator, by Steve Witkoff.

And then there's things that they hear in the public where Steve Witkoff himself, in the past, has gone forward and said that the Iranians are not

allowed to have any enrichment, that even 1 percent enrichment would be too much. Other administration officials saying similar things.

And that yesterday, of course, on Truth Social President Trump himself coming out and saying that there would be no enrichment, and that is the

other big thing for the Iranians. They say that enrichment for them is an absolute red line. They have no issues, they say, with one of the proposals

that appears to be on the table.

This is something that CNN has learned, that apparently, the Trump Administration is thinking of possibly investing in Iran's civilian nuclear

program and creating some sort of consortium that would have the U.S. in it, some Middle Eastern countries, but also the International Atomic Energy

Agency to oversee nuclear enrichment that could happen on Iranian soil.

However, the Iranians have said that their own domestic enrichment, the enrichment that they're capable of doing, the progress that they've made on

this enrichment that is something that they feel that they have a right to, and that is something that they definitely want to keep.

And so therefore, as far as any negotiations are concerned, the Iranians are saying enrichment is something that, to them, would be a red line. And

now both sides appear to be trying to find a way out of that impasse. Last week, I was able to speak to the spokesman of Iran's Foreign Ministry, and

he said, where there is a will, there is a way.

However, the Iranians are saying that the enrichment is something that they will demand, that stays within their country, that they want to keep that

capability, and certainly something that they're not willing to compromise on, to the extent where they would say that they would give up enrichment

completely.

The Iranians are saying that they would, of course, allow inspections, that they wouldn't allow very intrusive inspections, and that they would be

willing to prove that their nuclear program, as they have said all along, is for civilian purposes only. But as far as enrichment is concerned, is

something that they say that Iran has sacrificed for and technology that they themselves have developed, and certainly not something that the

Iranians are willing to give up, Eleni.

GIOKOS: It's really interesting. I mean, to your point, something that's on the table that the United States could be part of the enrichment supply

chain in Iran is definitely of interest, Fred.

[09:25:00]

So, we'll see how those negotiations pan out. Much appreciated for your time. We're learning new details about Sunday's violent attack on a Jewish

gathering in Boulder, Colorado and the suspect accused of carrying it out. Mohamed Sabry Soliman, an Egyptian national in the U.S. illegally, made his

first court appearance on Monday.

Authorities have charged him with a hate crime. He's also facing 16 counts of attempted murder. CNN's Whitney wild is in Boulder and spoke to our John

Berman a short time ago about this rapidly developing story.

WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: The Department of Justice has charged this man with a hate crime that's in addition to a very long

list of state charges, there's more than 40 charges total, as you mentioned, the 16 for attempted murder alone, and then a long list of

charges related specifically to the Molotov cocktails in total.

The state charges could result in a very long sentence if he hits the maximum. We're talking more than 400 years on paper, that is virtually a

life sentence. The same goes for the Department of Justice Homeland, the hate crime charge, John, when that hate crime charge is charged with an

attempted murder that could also result in life behind bars.

There's much more detail coming forward from law enforcement, both on the federal side and the local side, and it really paints a picture of how this

all happened. Law enforcement says he planned this attack for a year, and as you mentioned, he tried to get a gun. He went as far as taking a

concealed carry class and learned how to shoot, but then when he went to buy the gun, he was denied, because he is not a citizen.

He waited until his daughter graduated high school to actually carry out this attack. She graduated Thursday. We know he carried out this attack on

Sunday. He learned how to make these Molotov cocktails again because he was rejected from buying the gun. He turned to Molotov cocktails, and he

learned how to make them, you know, basically by watching videos online.

He also learned about this group online, John, and he was able to get so close to them because he posed as a gardener, he dressed as a gardener, he

bought flowers, and so he was able to approach this group without much suspicion at first, until again, as we know, he carried out this horrific

attack.

He threw two Molotov cocktails at that group. 16 more he left, you know, he didn't detonate those. And law enforcement was able to get quite a bit of

detail out of him. He said that he threw the first two, but then he got scared, because he never hurt anyone before. But even with that, John, he

expressed no remorse, he said he would do it again, and he had planned to die.

We are also learning more about the victims. We know that they are between 52 and 88 years old. Horrifyingly, one of those victims is a Holocaust

survivor. The total number of victims now stands at 12. Here is a local rabbi who says six members of his congregation were among the victims.

(BEGIN VIDEO CLIP)

RABBI MARC SOLOWAY, BONAI SHALOM SYNAGOGUE: It's just shattering that, you know, some of that dream has been smashed in this horrific attack. They

were violently and brutally attacked by fire. And it's like brings up horrific images of our past, you know, just the idea of someone who's

literally got their body on fire.

(END VIDEO CLIP)

WILD: He is still in custody in Boulder County jail. Now he makes his next court appearance on Thursday.

GIOKOS: I want to get you up to speed now on some other stories that are on our radar right now. In South Korea, Opposition Leader Lee Jae-myung is

projected to win the presidential election, according to a joint exit poll published by Korean broadcasters, KBS, MBC and SBS.

Official results have yet to be announced. The country is hoping to move on from months of political turmoil and division after the brief martial law

declaration by Former President Yoon Suk Yeol in December. Dutch Far Right Freedom Party Leader Geert Wilders has announced that the party is leaving

the governing coalition toppling the Dutch government.

He blamed it on the refusal by other coalition members to support measures to stop the influx on asylum seekers. Police in Portugal say they will

carry out a new search near the resort where toddler Madeline McCann went missing 18 years ago. They say they're acting on a request from a German

public prosecutor.

Main suspect in the case is a German national, though he has denied any involvement in her disappearance. All right, we've got around a minute to

go before the start of trade in the U.S., and we've just had some reports coming through from Ford, the automaker. They're saying for the month of

May, year over year, they saw a 16 percent increase in sales.

And that has to do with the boost in internal combustion engine sales that is offsetting the loss in electric vehicle sales. That is actually boosting

the U.S. futures right now, that is going to be impacting sentiment, I think, across the board in the United States, after pretty muted starts to

trade for the month of June with so much uncertainty that we've been seeing.

[09:30:00]

So, these are the futures slightly down on the DOW and S&P -- back, looking slightly better. These numbers from Ford really showing perhaps things

could change today, and that is the sound of the opening bell.

(COMMERCIAL BREAK)

GIOKOS: Right. Welcome back. I'm Eleni Giokos in Abu Dhabi, and you're watching "Connect the World". Markets in the United States have just

started their trading day. Despite the fact we've seen so much uncertainty on tariffs. We're seeing a bit of a mixed bag, as you can see, DOW, NASDAQ

and S&P all flat and trying to find a bit of direction.

We had those Ford sales numbers that came through for the month of May, perhaps going to inject a little bit of excitement, but the steel industry

is anticipating the U.S. President's decision to bring in tariffs on aluminum and steel as well. That is set to come into effect on Wednesday.

Now, at the same time, shares of the big three, U.S. automakers tumbled yesterday as the industry braces for higher costs to build vehicles in

America. Meantime, China's manufacturing activity declining in May. It's the worst drop since 2022 according to a private survey suggesting U.S.

tariffs are affecting Chinese exports.

We've got CNN's Matt Egan joining us from New York, analyzing all these numbers and so much to get through. Matt, that 50 percent tariff on steel

and aluminum imports goes into effect tomorrow. So, what are we anticipating? What is the mood? And I just mentioned that Ford Motors came

out with those pretty good May numbers in terms of sales, but it's going to affect the auto industry

MATT EGAN, CNN REPORTER: Yeah, Eleni, it's got to affect the auto industry, because they use a lot of steel, and that steel is about to get much more

expensive because of the 50 percent tariff that the president says he's going to impose starting tomorrow. And so, we saw a reaction yesterday in

the stock market with the automakers, right Ford, General Motors, Chrysler Owner Stellantis, all of them moving 4 percent lower yesterday on the

tariff news, even Tesla got hit by 1 percent.

[09:35:00]

Now we know that the president loves using tariffs, and he's trying to use them to revive America's Rust Belt. And this news was cheered loudly in the

-- steel sector here in the United States, yesterday we saw steel dynamics in new course spike by 10 percent. Cleveland Cliffs went up by more than 20

percent for its biggest one-day gain in almost a decade, right?

Investors are betting that these tariffs are so high that they are going to crowd out foreign competition. And the president certainly has a point here

when it comes to steel, right? We know that steel employment and steel production is just a fraction of what it was decades ago.

And this has been really painful for a lot of communities in the Rust Belt. And you look at U.S. Steel, and it used to be the most valuable company on

the planet, and in this modern economy, it's kind of an afterthought now. And so, analysts do say that 50 percent tariffs if they stick, and that's a

big if, but if they did that, that could end up boosting some capacity, some steel production here in the United States.

But the ironic part here is that they're also saying that this is going to hurt manufacturers, because a lot of manufacturers, like autos, use steels.

And the really ironic part is that even though the steel industry employs a lot of people, there's a lot more people that are employed by companies

that use steel.

Larry Summers, the Former Treasury Secretary, he's warning that this 50 percent tariff is going to backfire. Take a listen to what Summers said.

(BEGIN VIDEO CLIP)

LARRY SUMMERS, U.S. ECONOMIST: Net effect of this is going to be to destroy manufacturing jobs. The net effect of this is going to be to push up

consumer prices to make, for example, our automobile industry less competitive than it would otherwise be. This is ready fire aim, kind of

policy, it is -- doesn't follow from any kind of coherent economic logic.

(END VIDEO CLIP)

EGAN: And we don't have to look all that far back in history to understand how this could play out. Back in 2018, the president-imposed steel tariffs,

and yes, they did boost jobs, but at a very high cost to steel customers, $900,000 per job saved in the steel industry. That's according to research

from the Peterson Institute.

And when you look at the employment changes, yes, steel jobs went up by about 1000 that's just a tiny increase. But look at that a 75,000-job loss

in the manufacturing sector, and we don't know exactly how it's going to play out this time, but history does show that this can be a risky

strategy, Eleni.

GIOKOS: I know I mean, and the truth is, it's about whether the U.S. can produce steel. It's whether it can do it and it can be economically viable.

I want to quickly talk about China and its purchasing managers index came through lower than anticipated. In fact, it's showing that it's

contracting.

What are we seeing in terms of the impact on China, on Trump tariffs? It seems like it's already seeping through into the economy.

EGAN: Yeah, Eleni, definitely, this is clear evidence of the trade war doing real damage to China's manufacturing machine. This survey showed that

manufacturing contracted in May at the fastest pace in almost three years. Everything was down across the board, right? New orders fell, manufacturing

output fell, importantly, exports also fell at an accelerated pace.

You put it together, and it paints the picture of the manufacturing industry that is clearly under pressure from very sky-high tariffs right

now imposed by the United States, of course, lower than they were a few weeks ago, but still very, very high at 30 percent.

And I think the number and the stat that's really going to get the attention of officials in Beijing is the fact that this survey also found

that the jobs market in terms of manufacturing, remains very much under pressure, with employment falling for the second month in a row and falling

at the fastest pace since January.

And we know that officials in China are watching very closely to make sure that there's no damage to manufacturing workers, because that can obviously

cause some pressure there in China, and so we are starting to see some evidence that the trade war is doing damage here.

GIOKOS: Yeah. All right. Matt Egan, thank you. We've run out of time. We'll be back after the short break. Stick with CNN.

(COMMERCIAL BREAK)

[09:40:00]

GIOKOS: The top tennis woman players in the world are booking spots in the French Open semifinals, including world number one Aryna Sabalenka. She had

a challenging quarter final match, but still managed a straight set to win to advance. "World Sport" has more after the short break. And I'll be back

in 15 minutes with more "Connect the World". Stick with CNN,

(COMMERCIAL BREAK)

[09:45:00]

(WORLD SPORT)

[10:00:00]

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