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Trump Touts Tariffs as a Win; Negotiations Not Guaranteed on Tariffs; European and Asian Markets Fall as Tariffs Raise Recession Concerns; South Korea's Yoon Ousted. Aired 4-4:30a ET

Aired April 04, 2025 - 04:00   ET

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

[04:00:00]

SCOTT JENNINGS, CNN SENIOR POLITICAL COMMENTATOR: ... and if they were to do it properly, I think they'd make a bajillion dollars. So, I'm going to go with "Snow White".

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JENNINGS: Yes. Great film. I think it could be done.

LATHAN: Well-played. Well-played.

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KIM BRUNHUBER, CNN ANCHOR: Good morning and welcome to all you watching us here in the United States Canada and around the world I'm Kim Brunhuber.

It's Friday April 4th 4 a.m. here in Atlanta. straight ahead on EARLY START.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It was a sick patient that went through an operation on Liberation Day.

UNIDENTIFIED MALE: The first full day of Donald Trump's so-called economic liberation saw global markets plunge.

UNIDENTIFIED MALE: America's got to stop being exploited. Then and only then will Donald Trump make a deal with each country.

UNIDENTIFIED FEMALE: Not the end of the day. It is those who are watching us right now that will be suffering from these tariffs

UNIDENTIFIED MALE (through translator): He shocked the people and caused chaos across all fields

UNIDENTIFIED MALE: The Constitutional Court has ruled in favor of removing impeached president Yoon Suk Yeol from office effective immediately.

(END VIDEO CLIP)

BRUNHUBER: Global markets are tumbling for the second consecutive day following Donald Trump's far-reaching new tariffs on all U.S. imports. And here's a look at U.S. futures right now, all down as you can see at the moment.

Across the Atlantic, European markets opened a short time ago. The major averages are all down. Meanwhile, markets in Asia fell again today. Hong Kong's Hang Seng Stock Index, Japan's Nikkei, the Seoul Kospi and Australian markets are all down.

Now, all this follows the first full day of Donald Trump's so-called economic liberation. Global markets losing trillions of dollars in value, a falling U.S. dollar, with allies and foes alike planning retaliation. And despite dire predictions of a looming global trade war, the U.S. president says he believes all is going well. Trump downplayed Wall Street's losses and suggested he's open to negotiating tariff relief.

Now, some countries, including America's allies, are beginning to retaliate by imposing their own countermeasures to strike back the U.S. Others say retaliation is on the way. Despite this, the president's commerce secretary says the administration won't change course.

Let's notice.

(BEGIN VIDEO CLIP)

HOWARD LUTNICK, U.S. COMMERCE SECRETARY: The president is not going to back off. America's got to stop being exploited and you're going to see America prosper. And then, and only then, will Donald Trump make a deal with each country.

(END VIDEO CLIP)

BRUNHUBER: So, none of this is going over well in Europe. The European Commission president says the EU is finalizing its first round of countermeasures, and the French president is calling the tariffs brutal and unfounded. Emmanuel Macron insisted on European solidarity and suggested firms suspend investment in the United States.

Meanwhile, the German chancellor warns the Trump tariffs are fundamentally wrong and will cause harm around the world.

All right, for more international reaction, I want to bring in CNN's Hanako Montgomery, live in Tokyo, and our Fred Pleitgen in Berlin. Fred, I'll start with you.

So, the European markets are just opening up, but so far the general reaction in the region seems to be one of surprise and concern. What more are you hearing?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, it's certainly bad, and I think you guys just had the Xetra DAX, which just opened a couple of minutes ago, there on the board, obviously opening in the red once again, just like yesterday. It was a pretty catastrophic day in the German markets.

And of course, here, if we look at Germany, first and foremost, it's the auto industry that the government here and the people here are certainly very worried about. And they are one of the things that we have to keep in mind is that, first of all, the tariffs aren't just 20 percent, but it's 25 percent. And this hits Europe's largest economy at a time when it's already struggling, when the country's already been in recession, and the auto industry here specifically is having a lot of trouble, especially with the Asian markets as well.

And to then get hit by these new tariffs that, of course, are much tougher for the auto industry than for most other industries as far as trade between the EU and the United States is concerned, is definitely something that has a lot of people here in this country worried.

On the other hand, one of the things that we do see in situations like this, when Europe gets put under pressure by the United States, is that European solidarity does start coming through. One of the folks I want you to listen to is actually the British foreign secretary, because, of course, despite Brexit, the Brits are also here on the European continent as well. Let's have a listen.

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[04:05:00]

DAVID LAMMY, BRITISH SECRETARY OF STATE FOR FOREIGN AND COMMONWEALTH AFFAIRS: We have been absolutely clear that all options are on the table as we ensure the national interests of the British people, who will be very concerned at this time about how this affects the bottom line for them.

(END VIDEO CLIP)

PLEITGEN: All options on the table there from the British foreign secretary. Similar things that we're hearing from the European Union, Kim. One of the reasons why the Europeans are so angry about these tariffs is that they say yes, there is a trade surplus that Europe has with the United States as far as goods is concerned, with the U.S. importing more than it exports to Europe. But they say as far as the services industry is concerned, like, for instance, companies like Meta, like, for instance, companies like Google, there, there is a trade deficit that the Europeans have where the U.S. is obviously exporting a lot more to Europe than the other way around.

And so, therefore, the Europeans are saying those are some of the companies in the service sector that they might target if there are countermeasures. I think one of the things that we've seen crystallized, though, Kim, over the last couple of, I would say, half a day or so, is that the Europeans are talking about possible retaliation, but they are talking about negotiations first.

So they want to see if they can work that out. But at the same time, they do say they have 450 million fairly wealthy consumers here on the European continent, and they can certainly leverage that in any sort of trade conflict with the United States -- Kim.

BRUNHUBER: Trump himself has said directly that he expects countries to negotiate, and this will give them the U.S. a strong hand in that.

I want to go to Hanako. So the Asian markets, they continued their slide today, all closing down significantly for the second day. So take me through what the climate is like for people living in the region following this dramatic drop.

HANAKO MONTGOMERY, CNN CORRESPONDENT: Yes, of course, Kim. I mean, as you described there, Asian stock markets are still reeling from the latest U.S. tariff hikes. I mean, if you take a look at the benchmark Nikkei 225 in Japan, for example, that's on track to record the largest losses in a week since 2020, the pandemic.

And I mean, Kim, as you just described there, Asia, of course, is still reeling. They're very much in shock about the U.S. tariff hikes. And really, it seems as though countries are trying to figure out just the ways in which they can engage the United States in potentially lowering tariffs.

And of course, across the region, we saw very massive tariff hikes, but Southeast Asia in particular seems to be pretty hard hit. We were seeing in Vietnam, for example, 46 percent tariff hikes, Cambodia, 49 percent tariffs. And of course, for people in the region, that's particularly concerning because of the potential impact this could cause for their domestic economy.

Here's what one garment worker from Cambodia said about the potential concerns here.

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SANG KONG, GARMENT FACTORY WORKER (through translator): I want the U.S. to reduce the tariff on the country, and I want the factory to give me more overtime work so workers can make more money. With the introduction of these tariffs, if the factory shuts down, we'll all die because we can't afford to live with high costs from the rent and all kinds of goods and food, too.

(END VIDEO CLIP)

MONTGOMERY: I mean, very real fears here, Kim, about just how high these tariffs are for countries in Southeast Asia and what kind of impact they will have within their countries.

Now, I just also want to point out here that, of course, in Vietnam, for example, about a third of the country's GDP comes from U.S. exports. And in Cambodia, more than a third of the country's exports actually go to the United States. So when these tariffs potentially come into place, they could spell a lot of trouble for these two nations.

Now, Kim, also, I've spoken to a couple of experts about just why we're seeing such high tariffs for Southeast Asia in particular. And the reason does seem to be that in recent years, a lot of international companies, companies like Apple and Nike, for example, have been moving production to this part of the world from China in order to avoid the existing levies imposed on China during Trump's first presidency. It's much cheaper to do business now in this part of the world.

But again, it seems as though there's really no escaping Trump's tariffs right now. And as you kind of mentioned there, Kim, right now, of course, these countries seem to be trying to engage the U.S. president in some kind of talks, hoping to just kind of lower the temperature and hoping to soften the blow of these tariffs. But whether that works, I mean, only really time will tell. But of course, for these countries, they do hope they can engage in diplomacy -- Kim.

BRUNHUBER: Yes, absolutely. So many countries roiled in chaos right now. Hanako Montgomery in Tokyo, Fred Pleitgen in Berlin. I want to thank you both.

A ruling from South Korea's constitutional court leads to dancing in the streets of Seoul. The court decided about the country's embattled president. We'll have that straight ahead.

Plus, Vladimir Putin's special envoy now says the Trump administration understands Russia. We'll talk about what that means.

[04:10:00]

And the plan is in the works for Israeli Prime Minister Benjamin Netanyahu to come to the U.S. We'll look at when President Trump says that visit will happen. That's all coming up. Stay with us.

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BRUNHUBER: Returning to our top story, losses that began in the U.S. markets then spread to Asia are now reaching Europe early in the trading day and we're seeing losses across the board.

I want to bring in Alfred Schipke, who's the director of the East Asian Institute and a professor at the Lee Kuan Yew School of Public Policy and he comes to us from Singapore. Thank you so much for being here with us.

[04:15:00]

So, you know, today sort of feels like the day after because we've now had a full training day to see the reaction. You've said this, that the -- this is the nail in the coffin of the global trading system and it's not just the massive short-term impacts but equally the long-term consequences that are important here.

So, what do you mean by that? What long-term impacts are you expecting?

ALFRED SCHIPKE, DIRECTOR, EAST ASIAN INSTITUTE: Yes, we're of course currently observing, you know, the short-term pain especially as it's reflected in the equity market that you just mentioned but I think for many countries in this part of the world but I think across the globe, also in Europe, it is the question what is going to come after. Because the global system as we know it on April 2nd literally probably saw the nail in the coffin.

So, the question is how countries are going to organize themselves, how companies are going to organize themselves. So, this is a major shock to the global system.

BRUNHUBER: Yes, absolutely. So, that's how companies are going to react. I mean, looking at the reaction of countries, I mean, we heard Donald Trump say he doesn't want to see any reciprocal tariffs because that'll just escalate matters and that's kind of what we've seen in many countries in Europe and Asia.

What do you think that, you know, what kind of reaction are you expecting to see from countries as they sort of deal now, you know, a day after all this has happened?

SCHIPKE: My sense is that here in Asia and I would think also in Europe that overall the response will probably be more restrained and that is for a number of reasons. You know, first of all, we're expecting real pain also going to affect consumers, companies in the United States and ultimately the pressure there will be to maybe change course. So, to wait and see in a certain kind of way might make sense.

Secondly, especially here in Asia, the exposure to the United States either directly or indirectly is very large in terms of what it means for the economy. So, being very aggressive might be counterproductive. Now, of course, some of the larger countries such as China and then again the European Union are likely to move forward.

But again, I think it would be a combination of restrained responses, continued engagement and then also seeing whether in the United States there might be a change in the strategy, especially if consumers are going to get hit through higher prices, maybe unemployment and lower economic growth and continued poor performance in equity markets.

BRUNHUBER: Now, you touched on how companies are responding to all this. I want to drill down on that a bit more. Many of them are kind of being caught out here because in the last few years we've seen American companies trying to diversify away from China in the aftermath of COVID and the supply chain issues that we saw then.

But for many companies, they began relying on places like Cambodia. And Cambodia now has the highest tariff rate in Asia, the second highest globally. So, how much of a monkey wrench, I guess, does this throw into the planning and logistics of companies now? SCHIPKE: I think global companies that have been the driver of, you know, global growth over the last decades or so, both in the U.S. but also in Europe, are facing significant challenges. On the one hand, it's just the uncertainty, right? And even if tomorrow things were to be different, uncertainty is likely going to be high. So, investments will be lower because you don't know in which part of the world to invest anymore.

And then the second part is that, you know, what is the competitive advantage of global companies? And it is basically managing the global supply chain in a very efficient way. And if you now take that away and companies are starting to de-risk, and maybe this time it's de- risking from the United States, then the question is, what is your competitive advantage? If you do U.S. for the U.S., you do China for China, and you go around the globe, you're basically just becoming a local company rather than a global company that benefits from the U.S.

BRUNHUBER: Still so much up in the air but really appreciate getting your analysis on how this might all shake out. Alfred Schipke in Singapore, thank you so much.

[04:20:00]

Jubilation in the streets of Seoul today as opponents of South Korean President Yoon Suk Yeol celebrate his impeachment. The country's constitutional court ruled unanimously that Yoon be removed from his position effective immediately. They found his short-lived declaration of martial law in December to be a violation of the constitution. Yoon had ordered troops to drag opposition lawmakers out of the National Assembly.

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MOON HYUNG-BAE, CONSTITUTIONAL COURT ACTING HEAD JUDGE (through translator): He shocked the people and caused chaos across all fields, including the Supreme Court and the society, economy, politics, and diplomacy. As the president of all the people, he violated his duty to unite society beyond the people who support him.

(END VIDEO CLIP)

BRUNHUBER: Yoon issued a written apology today. South Korea's acting president will remain on the job for now, but a new election must be held within 60 days.

Vladimir Putin's top negotiator says the Trump administration understands Russian concerns after his high-level talks with U.S. officials Thursday. According to Russian state media, Kirill Dmitriev claims a main topic now is restoring Russian-American ties, a relationship that was apparently interrupted during the Biden administration.

Now earlier, he told CNN there has been major progress regarding a ceasefire in Ukraine thanks to the Trump White House. Here he is.

(BEGIN VIDEO CLIP) KIRILL DMITRIEV, RUSSIAN PRESIDENT, VLADIMIR PUTIN'S SPECIAL ENVOY: I think there is an understanding for how we can move to finalize the agreement, and there have been lots of discussion in that realm. Lots of differences still remain, but I think there are several passes to try to address all of the issues, and only a diplomatic solution can be possible.

(END VIDEO CLIP)

BRUNHUBER: Dmitriev has been highlighting Russia's absence from the list of global tariffs unveiled by President Trump on Wednesday and says U.S. businesses would be welcome in Russia if punitive sanctions over its war in Ukraine were lifted.

Ukrainian officials say three people were injured in a massive drone attack on the southeastern city of Dnipro Friday. The city's mayor says no one was killed and there was minimal damage.

In Kharkiv, at least two people were killed and another 32 injured during a Russian drone attack on Thursday. Russia has targeted Ukraine's second-largest city almost nightly over the past week.

Donald Trump says he expects to welcome Benjamin Netanyahu to the U.S. as soon as next week. The U.S. president says he spoke with the Israeli prime minister on Thursday as Israel has launched a major new expansion of its military operation in Gaza. Here's what the president told reporters aboard Air Force One.

(BEGIN VIDEO CLIP)

TRUMP: Gaza is a very, very important thing. It's been under siege for many, many years. It's a shame. It's a shame. A lot of people die in Gaza. Gaza's been a place we have it -- a lot of people die. A lot of bad things happen in Gaza. We'll see what we can do about it.

(END VIDEO CLIP)

BRUNHUBER: Meanwhile, a senior Hamas source tells CNN the group has rejected Israel's latest proposal for a temporary ceasefire in Gaza. The plan called for a 40-day pause in fighting in exchange for the release of 11 living hostages and half of the 35 deceased hostages.

Hungary says it will withdraw from the International Criminal Court, becoming the only country in the European Union to do so. Hungarian Prime Minister Viktor Orban says the court is a political tool. He welcomed Israeli Prime Minister Benjamin Netanyahu to Budapest Thursday, ignoring the ICC's arrest warrant for the Israeli leader. It's the first time Mr. Netanyahu has traveled to Europe since the court called for his arrest last May.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: You've just taken a bold and principled position on the ICC, and I thank you, Viktor. This is not only important for us, it's important for all democracies. It's important to stand up to this corrupt organization. (END VIDEO CLIP)

BRUNHUBER: The ICC claims Prime Minister Netanyahu bears criminal responsibility for war crimes in Gaza, including allegations of crimes against humanity and starvation as a means of warfare.

I want to bring in CNN's Nada Bashir, and she joins us live from London. So Nada, what do we know about the ramifications of this decision?

NADA BASHIR, CNN CORRESPONDENT: This is an important step, Kim, taken by the Hungarian government. The International Criminal Court does not have the power to enforce any sort of laws. It relies on signatory states to arrest suspects and then transfer them to the Hague.

So this is sending an important message from Hungary. And also, of course, for the Israeli Prime Minister, Benjamin Netanyahu, sending a message to the ICC as to his ability to operate fully as a leader on the global stage, although quite limited at this point, despite Hungary now announcing that it will begin taking steps to withdraw from the ICC today.

As you mentioned, though, the allegations that have been laid against the Israeli Prime Minister by the ICC are serious. They say they have reasonable grounds to believe that the Israeli Prime Minister holds criminal responsibility for war crimes, for crimes against humanity in Gaza, including using starvation as a method of warfare.

[04:25:02]

These are allegations that we have heard from numerous other organizations as well, including humanitarian organizations. But, of course, as we know, the Israeli Prime Minister and Israeli government have rejected these allegations. In fact, the Hungarian Prime Minister, Viktor Orban, was also among the first to criticize the ICC's decision when they issued that arrest warrant back in May of last year.

But, again, this is sending a message as to the authority, the scope of the power of the ICC. Of course, this is also sending a signal as to the close ties between Hungary and Israel as Israel begins to expand its operation in Gaza, which is increasingly becoming a deeply unpopular operation and military expedition for the Israeli government.

As you mentioned, though, we are expecting to also see now a meeting between the Israeli Prime Minister and the U.S. President Donald Trump in the coming days. That was that message sent by Donald Trump yesterday, speaking to reporters, expecting to hold those talks next week.

As the Israeli military now expands its operation, it says it is focused on seizing more areas in Gaza. And, of course, we have seen those troubling evacuation orders once again now for civilians in parts of southern Gaza being warned by the Israeli military to move north -- Kim. BRUNHUBER: All right, Nada Bashir in London. Thanks so much.

President Trump's trade war doing a real number on global markets. We'll have the industry is taking the heaviest hits and how regional powers are responding.

Meanwhile, the U.S. Secretary of State must face allies while his boss steps up his international trade war. We'll have the latest on that coming up next. Stay with us.

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