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Early Start with Rahel Solomon

Global Stocks Fall After Trump Imposes Tariffs; Trump Downplays Sell-Off, Says Negotiations Possible; South Korean Court Removes President Yoon From Office. Aired 5-5:30a ET

Aired April 04, 2025 - 05:00   ET

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

[05:00:16]

RAHEL SOLOMON, CNN ANCHOR: Good morning, and welcome to our viewers, joining us from the U.S. and all around the world. I'm Rahel Solomon, it is Friday, April 4th, 5:00 a.m. here in New York.

And straight ahead on EARLY START.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Tariffs give us great power to negotiate.

UNIDENTIFIED MALE: It's a very bad idea because we have a strength. It's a market of 450 million residents. That's Europe.

UNIDENTIFIED MALE: We haven't seen anything in my opinion this disruptive as long as I've been in the business.

UNIDENTIFIED FEMALE: I think the entire thing is it's bad politics.

UNIDENTIFIED FEMALE: It's hard to describe, honestly, excited, happy.

JOHN VAUSE, CNN ANCHOR: South Korea's constitutional court has ruled in favor of removing impeached President Yoon Suk Yeol from office, effective immediately.

(END VIDEO CLIP)

(MUSIC)

SOLOMON: We begin with the global markets tumbling for the second consecutive day, following President Trump's far reaching new tariffs on all U.S. imports.

Let's start with a look at U.S. futures right now. And right across the screen again, although clearly not as bad as yesterday morning. Dow futures look off about let's call it 1 percent Nasdaq off about half a percent, taking a look across the Atlantic.

European markets open a short time ago. And it is a similar picture, although even worse there. The FTSE off about 1.5 percent, CAC40 1-1/2 percent, in just about the same in Germany, a little bit steeper losses there.

Meanwhile, markets in Asia fell again today. Hong Kong's Hang Seng stock index, Japan's Nikkei, the Seoul Kospi, and Australian markets all lower between 9/10 of a percent in South Korea, to about 2-1/2 percent in Australia. And again, two point -- let's call it -- eight percent in Japan.

Now, all of this follows the first full day of Donald Trump's so- called economic liberation. Global markets are losing trillions of dollars in value, 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 that he believes all is going well.

Trump downplaying Wall Street's losses and suggested that he's open to negotiating tariff relief.

Take a listen.

(BEGIN VIDEO CLIP)

REPORTER: Are you open to deals with these countries if they're calling you?

TRUMP: Well, it depends. If somebody said that we're going to give you something that's so phenomenal, as long as they're giving us something that's good. For instance, with TikTok as an example, we have a situation with TikTok, where China will probably say, well approve a deal, but will you do something on the tariff? The tariffs give us great power to negotiate.

(END VIDEO CLIP)

SOLOMON: Well, now, some countries, including Americas allies, are beginning to retaliate by imposing their own countermeasures. Others say that retaliation is on the way. Despite that, White House officials say that the administration will not change course.

(BEGIN VIDEO CLIP)

PETER NAVARRO, WHITE HOUSE SENIOR COUNSELOR FOR TRADE AND MANUFACTURING: This is not a negotiation, Jesse. This is a national emergency associated with chronic and massive trade deficits that are brought about by higher tariffs and higher non-tariff barriers that take our jobs, that take our factories, that lead to massive trade deficits, that result in massive transfers of wealth into foreign hands, that jeopardize our manufacturing base and defense industrial base.

(END VIDEO CLIP)

SOLOMON: Now from Europe to Asia, from Canada to Brazil, the tariffs seem to have angered the leaders of most major economies, and they're not holding back.

(BEGIN VIDEO CLIP)

MARK CARNEY, CANADIAN PRIME MINISTER: They are all unjustified, unwarranted and in our judgment, misguided.

OLAF SCHOLZ, GERMAN CHANCELLOR: I believe the latest decision on tariffs by the U.S. president are fundamentally wrong.

EMMANUEL MACRON, FRENCH PRESIDENT: It's a very bad idea because we have a strength. It's a market of 450 million residents. That's Europe.

SHIGERU ISHIBA, JAPANESE PRIME MINISTER: We are extremely disappointed and regret that such measures have been implemented.

LUIZ INACIO LULA DA SILVA, BRAZILIAN PRESIDENT: We will take all appropriate measures to defend our companies and our Brazilian workers.

(END VIDEO CLIP)

SOLOMON: CNN's Fred Pleitgen, following all of this live from Berlin.

Fred, we just heard a sort of snippet of some of the reaction from European leaders. What more are you hearing? What's the reaction been like?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): Yeah. First of all, of course there is a lot of anger. There is the will, as they say, to strike back. But I think at the same time, right now, what we're sort of reading in Europe, Rahel, is that cooler heads appear to be prevailing, at least as far as brussels is concerned.

One of the things, though, that we are seeing, and you just showed the Xetra DAX there opening lower, of course, in the red once again, is that German automakers are extremely concerned. I mean, that's one of the things that people are definitely talking about here in Germany. What we have to keep in mind is that the auto tariffs are 25 percent rather than 20 percent, as with other goods from the European Union, so even higher than that.

[05:05:09]

And the German auto industry, which is very much the backbone, of course, of Europe's largest economy, is already in dire straits, as is. And so, these tariffs definitely, they believe, could hurt that industry very much.

At the same time, what we're seeing right now in Europe, we saw it there from Emmanuel Macron. We heard it from Olaf Scholz, the chancellor of Germany is that European countries are coming together and saying there could be retaliation, that they are willing to leverage the 450 million quite wealthy consumers that you have here in Europe.

But, of course, as we know, the United Kingdom, despite Brexit, is also part of Europe and has also been targeted by tariffs as well. I want to listen in to what the British foreign secretary had to say.

(BEGIN VIDEO CLIP)

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 interest 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: So that was Mr. Lammy there, speaking earlier today in Brussels. At the same time, one of the reasons why the European Union says they believes that these tariffs are so unfair is that we heard Peter Navarro earlier speaking about the fact that tariffs are one of the reasons why the U.S. has such big trade deficits.

Well, the European union is saying is that, yes, they do have a trade surplus with the United States, meaning they export more to the U.S. than comes back here. As far as goods are concerned. However, as far as services are concerned, it is very much the other way around.

So, one of the things that European politicians are talking about and the European Union is talking about is as retaliation. If that does happen, that then they might target the U.S. services industry and their exports, which are also worth a lot of money that come here to Europe.

However, what we're hearing from Brussels, what we heard late last night and hearing early this morning as well, is that negotiations are going to come first. But if those negotiations don't work out, then there are going to be retaliatory measures.

And it was quite interesting because I was just listening to the head of the German industries union earlier today, and he said, yes, they believe that there needs to be concerted European response, but they also believe that any measures, any countermeasures that are taken need to be flexible enough to be taken off the table as fast as possible. If negotiations do work out with the Trump administration -- Rahel.

SOLOMON: So, in that sense, perhaps the whiplash will -- will continue. Fred Pleitgen in berlin -- Fred, thank you.

Mexican president, meantime, Claudia Sheinbaum unveiling a broad economic plan on Thursday in the face of President Trump's tariff. She says that she is focused on strengthening domestic production of steel and aluminum, cars, pharmaceuticals, agriculture and other sectors. President Sheinbaum, touting the fact that Mexico was exempt from the new reciprocal tariffs, announced this week. And she's vowing to continue conversations with the U.S. based on cooperation and mutual respect.

(BEGIN VIDEO CLIP)

CLAUDIA SHEINBAUM, MEXICAN PRESIDENT (through translator): Well, it has to do with the good relationship we've built between the governments of Mexico and the United States, which is based on respect, with respect for sovereignty, collaboration and coordination, but with respect for Mexicans and national sovereignty.

(END VIDEO CLIP)

SOLOMON: As the world grapples with the aftermath of President Trump's tariff plan, one of the big questions is who will pay for them?

CNN's Richard Quest explains where consumers will feel the most impact.

(BEGIN VIDEOTAPE)

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: It is easy to think of tariffs on the big stuff the automobiles, the dishwashers and the like. But the truth is, most of us will feel our tariffs at places like this. The Heavenly Deli where you buy your food and drink every single day.

Just look. Tariffs. Tariffs. Tariffs. A bottle of San Pellegrino, it comes from Italy within the E.U. Now I know this costs about five bucks here. Tariff of 20 percent from the E.U. So, you're talking about roughly a dollar or so.

Who's going to pay the dollar? The importer passes it to the distributor. The wholesaler? The good lady at the desk. And pass it on to me.

You then start looking at other things. Licorice from Australia. Now there's an election in Australia at the moment. Anthony Albanese is facing the public. How is he going to explain how this 7.99 licorice is now suddenly 10 percent more expensive? What's it going to do to the sales?

Youve got to buy a new charger. You can never have enough chargers. Of course, Heavenly sells chargers. The charger and the cable come to about 20 bucks, but these come from China.

And there is a 34 percent tariff on from China, 34 percent of 20 bucks. Do the mathematics yourself. Suddenly, this becomes more expensive.

[05:10:02]

And then, you've got the little stuff the ghost pepper spicy chicken flavor from Malaysia costs 2.99. It's described as spicy madness. How about how much madness wants the 24 percent tariff goes on, and the 2.99 goes up.

As it says here, flaming spicy madness. Are they talking about the food or the tariff?

Whichever way you look at it, everything's going up in some shape or form. And it really is just a question of who is going to eat the cost.

Richard Quest, CNN at the deli in New York. (END VIDEOTAPE)

SOLOMON: All right. Coming up, the global fallout from Trump's new tariffs have been swift. They have been widespread. But what do all of these changes mean for America's small business owners? We'll talk to one coming up next.

Plus, they're dancing in the streets of Seoul today after a ruling from the constitutional court on the future of President Yoon Suk Yeol.

And Vladimir Putin's special envoy now says that the Trump administration, quote, understands Russia. We'll talk about what that means later in the program.

(COMMERCIAL BREAK)

[05:15:43]

SOLOMON: Welcome back.

The U.S. vice president says that Donald Trump's massive new tariffs are needed to bring about a total shift in the American economy. J.D. Vance railing against what he called the globalist system, which he says has caused the U.S. to incur huge debts, to, quote, buy things that other countries make for us. And he insisted that American small businesses are going to benefit from the upheaval.

(BEGIN VIDEO CLIP)

J.D. VANCE, VICE PRESIDENT OF THE UNITED STATES: The people in Wall Street have done well. We want them to do well, but we care the most about American workers and about American small businesses, and they're the ones who are really going to benefit from these policies.

(END VIDEO CLIP)

SOLOMON: But many small business owners worry that the rising costs that come as a result of the new tariffs will force them to fold, saying that the extra cost cannot always be passed on to consumers.

I want to now bring in Eunice Byun, who is the co-founder and CEO of the kitchenware company Material. She is with us from New York.

Eunice, great to have you this morning. How are you responding to these tariffs for your business? What conversations are you having with your team, with your suppliers? What's the plan?

EUNICE BYUN, CO-FOUNDER, MATERIAL: Yeah. So, we are doing our best to interpret the tariffs, the impact in the specific categories that we play in and really thoughtfully consider what can we actually do to change our current supply chain. Because, you know, we design everything in house.

We cover a lot of different categories. We have about 60 skews across cutlery. We have bestselling prep ware and cutting boards and simply copying and pasting that supply chain from one region to the next is not easy. You know, the knife factory that does it best doesn't necessarily do tools best. It doesn't do cutting boards best.

So we've spent the last 6 or 7 years scouring the globe to find the right partners that can deliver the quality and the high value and utility that our customers have come to expect. So having that all kind of in an upheaved state is something that we're definitely grappling with.

SOLOMON: And when people say, well, just cut your margins or raise your prices, how do you respond to that?

BYUN: Yeah. You know, we -- we are a small, fast growing company. And I think because of that margin is so important because it allows us to reinvest in our business. So, by cutting our margins, that means we can buy less inventory. That means we can't hire as quickly.

So, essentially, it means we can't fuel the growth that this economy should be fueling. And especially as a small business that's U.S. based, that's employing, you know employees across the United States of America. We want to be able to fuel growth and expansion in this country.

SOLOMON: Yeah. It's interesting. Before you started your own business in a prior career, you advised startups. I'm curious what advice you would give a client, wondering how best to respond in this environment. And obviously it's sector by sector. But -- but -- but broadly speaking, what would you tell somebody who's asking for your advice?

BYUN: I think the most important thing right now is just not to have any kneejerk reactions. I think there's still a lot of information that we're all digesting. I think there's a lot of stuff that we still don't know, and were trying to get clarification on. So, I think it's, you know, approach it thoughtfully. Stay true to your values.

You know, what material were about innovation, design, ensuring that we deliver high quality to our customers. So, you got to stay true to that and -- and not do anything quick. Thats going to jeopardize the health, and really the intention of your company.

SOLOMON: You know, I'm not sure if you heard the clip as we were coming into you, but it was the vice president essentially saying that this will be positive for small businesses. And when President Trump says things like, I think it's going very well, the markets are going to boom, the stocks are going to boom. The country is going to boom.

How do you respond? What do you think when you hear this?

BYUN: I think honestly right now, it's -- there's the grounds beneath us are still shifting so much. So, there's a lot of work to be done. And unfortunately, you know, big companies can more easily absorb these tariffs and these changes. Small businesses, we feel every penny.

So, for us, I think right now, it's a matter of talking to as many advisors as we can, trying to gather as much information, you know, be true to our customers, ensure that we're sharing with them very transparently what's going on.

[05:20:03]

I know for ourselves that material we're already talking to our manufacturing partners, we're talking to our retail partners. We're trying to figure out how do we collaborate, how do we actually not ensure that the consumers are bearing the brunt of this? Because at the end of the day, it's the companies. It's the small businesses that are left holding the bag.

SOLOMON: Yeah. Eunice, we appreciate your time today and certainly good luck with the business moving forward in this environment. Thank you.

BYUN: Thanks so much.

SOLOMON: All right. And coming up on EARLY START, celebrations in Seoul, opposition protesters are cheering a major decision from South Korea's constitutional court.

Plus, Israel's Benjamin Netanyahu receives a warm welcome in Hungary as the country announced it is pulling out of the International Criminal Court.

We'll be right back.

(COMMERCIAL BREAK)

[05:25:16]

SOLOMON: Search for a new president starts today in South Korea. The country's constitutional court upheld the impeachment of previous President Yoon Suk Yeol.

CNN's Mike Valerio has the details.

(BEGIN VIDEOTAPE)

MIKE VALERIO, CNN CORRESPONDENT: We're pretty much in the center of the old city. For anybody who's ever been to Seoul. This is right in front of Gyeongbokgung Palace, Gwanghwamun Gate. It's been here for centuries, a gathering point, and this has been a gathering point for people who are rallying against the now former president of South Korea, Yoon Suk Yeol.

But a lot of people are starting to leave. It's a far cry from the thousands of people who were cramming in close to the constitutional court and all the streets and alleyways that had not been closed down by police. So, people here are having their after lunch sort of victory celebrations. And now what happens next is that we have all on our phones, read the throwing in the towel statement, so to speak, so to speak, of the former President Yoon Suk Yeol, where he apologized and said a word of thanks to his supporters.

Now, we did speak to an anti-Yoon demonstrator. Listen to her reaction, what she felt when the verdict came down earlier today.

KIM NA-YOUNG, ANTI-YOON PROTESTER: It's hard to describe, honestly, excited, happy. But the moment the constitutional court said that he was impeached, I started bawling. I cried for four minutes and I couldn't talk. And it was just such a -- it was such a heavy feeling.

VALERIO: And this is a very visceral moment for millions of South Koreans, because this was all about martial law. This all goes back to December 3rd of last year, when the now former President Yoon Suk Yeol to try to solve a political crisis, sent troops, members of the military to the national assembly a couple of kilometers away from where were standing, the heart of South Korean democracy in the name of from his point of view, resolving a logjam, resolving a political crisis.

But those gathered around us, certainly the majority of South Koreans said sending in the military is not how a democracy functions. You don't send troops to get rid of a political logjam and solve a crisis. So, where do we go from here? Later in the evening, down one of these main avenues, this is where we're going to see a rally of anti-Yoon supporters, those who are thrilled with today's decision, 7:00 p.m. local time by city hall.

We're now headed towards elections within the next 60 days. That brings us around to June 3rd. The country is going to need to elect somebody who can go toe to toe with the Trump administration after 25 percent tariffs levied against South Korea yesterday.

(END VIDEOTAPE)

SOLOMON: Our thanks to Mike Valerio there. After the break, what Russia's top negotiator is now saying about the Trump administration. We'll have the latest, straight ahead.

Plus, more on the global economic fallout from Donald Trump's far reaching new tariffs. We'll be right back.

Stay with us.

(COMMERCIAL BREAK)