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Early Start with Rahel Solomon

Trump Pauses Most Tariffs for 90 Days But Hits China Harder; Markets Gain After Trump Halts Tariffs for 90 Days; Sanders Criticizes Trump's Economic and Foreign Policy; Inside El Salvador's Mega-Prison. Aired 4-4:30a ET

Aired April 10, 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]

POLO SANDOVAL, CNN ANCHOR: Hello and welcome to all of our viewers joining us from around the world and also streaming on CNN Max. I'm Polo Sandoval in for Rahel Solomon, and you're watching EARLY START.

Just ahead in the next hour, there is no end in sight for the deepening trade war between the U.S. and China. We'll be taking a closer look at the impact of China's reciprocal tariffs expected to hit the U.S.

Plus, U.S. Senator Bernie Sanders connecting with voters at a CNN town hall, why he says the tariffs are bad for U.S. interests, both home and abroad.

And the Trump administration is restarting their deportation flights to El Salvador. We have new reporting about the potential plans to expand the operation, including a U.S.-run prison.

And good morning to you as stock markets post major gains, Donald Trump is trying to take a victory lap after hitting pause on a crisis entirely of his own making. He put most of his aggressive new tariffs on hold for 90 days, despite insisting earlier that the historically high levies were here to stay.

And I want to show you exactly what's going on over at the European markets in early trading right now. Certainly, the numbers that European markets would want to see with a lot of green, a lot of positive numbers here, but then we also bring it back home where the U.S. president's walk back came just after days of some worldwide concerns about the sell-offs and also worsening fears of U.S. bond market meltdown, I should say. He admitted that people were getting -- to use his word -- yippy over the chaos. Well, it turns out they don't like watching trillions of dollars wipe from the global economy.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I was watching the bond market. The bond market is very tricky. I was watching it. But if you look at it now, it's beautiful. The bond market right now is beautiful. But yes, I saw last night where people were getting a little queasy.

(END VIDEO CLIP)

SANDOVAL: Wall Street breathing a sigh of relief over the pause. U.S. stocks posting their highest day in 16 years. But they remain lower than they were before all of this tariff turmoil.

Let's also look at some of our U.S. futures right now. Certainly, the opposite of what we're seeing overseas with a lot of red, a lot of negative numbers. But again, it's important to point out we're yet to see exactly what will happen once trading begins in the United States. But gives you a sense of some of the concerns for U.S. markets at this hour.

President Trump claiming that the decision to suspend tariffs was, as he put it, written from the heart and said, we don't want to hurt countries that don't need to be hurt. His quote.

The notable exception being China, of course, President Trump ramped up tariffs on Beijing to a staggering 125 percent. And that's after China raised retaliatory tariffs on U.S. goods to 84 percent.

In the major agent Asian markets. Japan's Nikkei gained a whopping 9 percent today. Hong Kong's Hang Seng rose 2.5 percent. And in Seoul, that market adding nearly 5 percent there.

Our correspondents keeping a very close eye on what exactly is going to happen next amid all of this uncertainty. Our Beijing bureau chief, Steven Jiang, joins us now live alongside CNN's Melissa Bell in Paris. Melissa let's start with you. More on the situation in Europe right now.

MELISSA BELL, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, those surging markets definitely a reflection of the huge sense of relief there is here. Of course, everything is not cleared up. There's still this 90 day deadline looming. Nothing definitive has been decided. And of course, the fear of these reciprocal tariffs continues to loom in the longer term. But it certainly gives a little breathing space for everybody in the markets, certainly reflecting that.

We've had a statement from Ursula von der Leyen, the European Commission president, speaking of her being pleased about this pause, but also reminding through her statement that Europeans are very much going to continue focusing on the 83 percent of the global -- of the global market of the global economy that does not include the United States and that Europeans are going to be seeking to increase their trade with. So that is a factor that continues.

[04:05:04]

Remember also that Europeans decided only yesterday, voted only yesterday, Polo, on their response to the steel and aluminum tariffs. They will come into effect now on April 13th.

The next round of tariffs they're going to consider their response to are the auto and auto parts tariffs. It is simply the reciprocals, those big ones, the 20 percent that have been paused and therefore the response paused as well. Have a listen to what the Spanish prime minister had to say about all this.

(BEGIN VIDEO CLIP)

PEDRO SANCHEZ, SPANISH PRIME MINISTER (through translator): Nobody wins a trade war. Everybody loses. For this, the measure announced by the U.S. administration pending review of the exact details seems like an open door for negotiation and as such to an agreement between countries.

(END VIDEO CLIP)

BELL: The head of the Bank of France has also been speaking to this this morning on French radio saying that this suspension of the -- for 90 days is certainly a step in the direction of reason and a step away in terms of fears of the global recession. But still, there is a lot here that needs to be worked out and Europeans will continue to work on their response to the second round of tariffs, the auto and auto parts tariffs, even as they wait to see what happens beyond that 90 day pause -- Polo.

SANDOVAL: Melissa Bell, thank you so much for keeping us posted on that. Even got to see you in a Ferrari yesterday. We're missing that car this morning, though.

Let's now head over to China now. Steven, I'm curious, markets did see some gains despite the deepening trade war between the U.S. and China. What's happening there where you are right now and any word from President Xi that he may potentially want to strike a deal with the United States, which is what Trump claimed yesterday?

STEVEN JIANG, CNN BEIJING BUREAU CHIEF: Yes, Polo, in a pair of government briefings that wrapped up just a short while ago, both the foreign ministry and the commerce ministry actually declined to say what, if any, additional countermeasures China may launch to respond to Trump's latest China specific tariff.

Now Trump, of course, has claimed China's panicking. They're desperate to talk to him. But a lot of experts actually have seen the opposite has been happening. That is China's response so far has been very calibrated and deliberate, trying to hit Washington where it will sting. And they say China has been studying Trump for a long time and they've been watching closely how he deals with other trading partners.

And the conclusion so far seems to be concessions only invite more pressure. And the only language Trump understands and respects is leverage.

Now, by singling out China now in his tariff war, Trump is in a way reinforcing this notion here that the ultimate strategic goal of all the tariff is to contain and suppress China.

So at this stage, it's really difficult to see how President Xi Jinping is going to back down from all the countermeasures, although the commerce and foreign ministry spokesman, while vowing to fight on to the end, as they put it, they also leave the door open for negotiations only if they are based on, quote, unquote, equality, respect and reciprocity.

Now, we have seen the additional 84 percent tariffs China imposed on U.S. imports has taken effect a few hours ago. So that's, of course, part of their broader retaliation package announced in the past few days.

But perhaps more importantly, Polo, they have vowed to turn pressure into motivation by doing exactly what they've been doing, that is trying to rewire their economy domestically and their trade ties as well. So it's really, in a way, how the government here is trying to convince people to endure pain in the short term. And a lot of people also agree they are much equipped to do that because of their political system.

Xi Jinping himself has said the young people here should learn, eat bitterness -- Polo.

SANDOVAL: That's fascinating. China clearly seeing this coming and preparing for it, even sharing advice for their young residents. Thank you so much to you, Steven Jiang, Melissa Bell. You both have a good day. Thank you.

All right, so as far as the massive hike on tariffs to China, the U.S. secretary of commerce says that he will not be discussing the matter with Beijing. The job will fall to President Trump himself. That's according to Secretary Howard Lutnick.

(BEGIN VIDEO CLIP)

HOWARD LUTNICK, U.S. COMMERCE SECRETARY: I am not engaging with them. Scott has not engaged with them. And the president, you know, he does expect to have conversations with President Xi, but that is between them.

If we get a contact, we will just pass it to the president. This is really about him. He has said publicly that maybe they don't really know the best way to go through.

But the answer really is, it's a phone call between the two leaders of these giant countries that they can work it out together.

(END VIDEO CLIP)

SANDOVAL: All right. Let's do some fact checking and analysis from an economist, Keyu Jin, joining me now live. She is the author of "The New China Playbook" and also joins me from Hangzhou, China. Thank you very much for joining us right now.

[04:10:02]

I'm curious as you hear some of the statements, some of the remarks from the commerce secretary and also from your expert perspective here, how you're joining us right now. I'm curious as you hear some of the statements, some of the remarks from the commerce secretary and also from your expert perspective here, how is China approaching this in terms of countermeasures and launching potential retaliatory tariff strike of its own?

Should consumers here in the U.S. be worried about what we may see next from China?

KEYU JIN, ECONOMIST: Well, in the short term, certainly China wants to be in a position of strength when they come to the negotiation table with Trump. And they are exerting equivalent pressure on the U.S. They want the U.S. suppliers to feel it, just as Chinese suppliers will also feel it and bring the U.S. back to rational negotiation.

Let's remind ourselves that during the first trade war, 25 percent tariffs on U.S. soybeans eventually led to the resistance in agricultural states, and this facilitated the phase one agreement. So I think that is a calibrated strategy, although China's position, fight until the end if necessary, goes along with what was said, that compromise is not an option because compromise will only lead to further demands from Trump.

SANDOVAL: In listening to Secretary Lutnick, I'm curious, do you think that the U.S. administration, the Trump administration really seems to be missing something here in terms of this global trade war?

JIN: Yes, I think it's totally doing the opposite thing of what it is intended. It is simply accelerating China's upgrading in the industrial structure into high value added into high tech sectors that actually directly compete with America, whereas it could have been stuck doing low end manufacturing for some time. They are completely embracing ways to offset the tariffs digital e-commerce platforms, cloud, AI, etc., and that's going to accelerate their technology.

Beijing has completely doubled down on more stimulus, more pivoting to new markets, technological innovation push, and they are in a survival instinct right now.

SANDOVAL: So what I'm hearing from you is that China really has been, in essence, sharpening its game when it comes to competitiveness in the global market. So maybe expand on that a little bit, a little bit more, Keyu, exactly how it's sharpening that economic instinct to survive.

JIN: Well, China has long been preparing for this since Trump 1.0. Chinese companies have been set off on a globalization frenzy. They've altered business models, opened new factories and opened new markets in a pace that would have been unseen before. And of course, this whole new tech program, the recent programs, AI plus, AI in every single sector possible.

DeepSeek didn't arise out of comfort. It arose from under pressure. And so that is the big push.

And of course, opening new markets and signing new trade agreements are set to push to make tariffs zero for 54 sectors, just push countries and China together. SANDOVAL: Yes, it's important what you write to technological development. Once they have that on their side, they certainly have an advantage. Thank you so much for taking the time. Economist Keyu Jin, really appreciate your perspective.

JIN: Great to be with you. Thank you.

SANDOVAL: Our pleasure.

Well, U.S. Senator Bernie Sanders delivered a wholesale rejection of President Trump's trade wars on Wednesday night. In a CNN town hall the independent lawmaker from Vermont criticized the Trump administration's economic and foreign policy.

He says the Trump White House has damaged relationships with longstanding U.S. allies and tarnished America's reputation around the world.

(BEGIN VIDEOTAPE)

SEN. BERNIE SANDERS (I-VT): Throughout the history of the United States and Canada, we have had a very warm, positive relationship. They are our neighbors. They are our friends.

And right now, I got to tell you that in Canada, when you have a president of the United States who goes out of his way to insult the prime minister, he calls him governor. Oh, by the way, you're a Canadian. We're going to make you the 51st state.

Canadians, who I love, they're great people. They're not coming into Vermont anymore. They're not coming into America. They're boycotting American goods. Similar to our friends in Mexico and all over the world. These are our allies. We fought World War II. We defeated Nazism, fighting with our friends in U.K. and France, throughout Europe.

And now they're saying, what in God's name is going on with the United States of America?

There's going to have to be acknowledgment that what we stand for as a country is not to be the bully of the world. Again, as I mentioned earlier, the idea that you insult the prime minister, that you tell Canada they're going to become our 51st state, that you tell the people in Denmark, oh, by the way, we're taking Greenland away from you. This is outrageous.

[04:15:00]

And what I would like us to be is a leader of the world based on our democracy as a model, based on our compassion, based on our work to fight climate change and help people all over the world, transfer away from fossil fuel to sustainable energy so that we can save the planet.

So that's a little bit what I'd like.

ANDERSON COOPER, CNN ANCHOR, AC360: Let me just ask you in terms of relationships, if the end result or the results in the next 90 days of these tariffs that the president has put on is a lowering of tariffs by other nations against the U.S., will it have been worth it? If this brings them to the negotiating table.

SANDERS: Nothing is worth it. Look, the isolation, how is it worth it? How what is worth it when you have people that have been our neighbors and allies and friends for almost 200 years in Canada now distrusting the United States, our friends in the U.K., throughout Europe, distrusting the United States? We are becoming isolated from the rest of the world.

So there's very little that I can see that would make it worth that.

(END VIDEOTAPE)

SANDOVAL: And the conversation with some of these newsmakers continues here on CNN. Former U.S. Treasury Secretary Janet Yellen will join CNN's One World today to talk about President Trump's trade war. That's at 11 a.m. in New York, 4 p.m. for viewers in London.

Still ahead here on EARLY START, the Trump administration, it is planning to deport more migrants to El Salvador's notorious mega prison. But some federal judges are pushing back. More on the legal back and forth when we come back.

And also, as the U.S. prepares to send more people to the notorious mega prison in El Salvador, CNN makes a rare visit inside to hear the stories of those in prison. You don't want to miss that story. It's coming up next.

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(COMMERCIAL BREAK)

SANDOVAL: U.S. officials tell CNN that the trump administration is preparing to send more migrants to El Salvador's notorious mega prison, and this comes after the supreme court ruled to allow President Donald Trump to continue using a wartime authority for deportations, known as the alien enemies act, but also added that migrants must be given adequate notice to challenge their deportations, and this has spurred some lawsuits in some parts of the U.S.

For example, on Wednesday, federal judges in New York and in Texas issued orders to temporarily halt the deportation of Venezuelan plaintiffs.

CNN's David Culver got an exclusive access to this mega prison in El Salvador, and he has his story. Some of the chilling stories of some of those inside, some of those stories told by their tattoos.

(BEGIN VIDEOTAPE)

DAVID CULVER, CNN SENIOR NATIONAL CORRESPONDENT: You can see the Santa Muerte. This is something that was actually adopted from Mexico's Sinaloa cartel and has been used by gangs across Latin America, including, as the director points out, 18th Street Gang.

CULVER (voice-over): Inside CECOT, El Salvador's notorious terrorism confinement center, tattoos aren't just art. Officials say they're messages, warnings, a visual record of where someone's been and what they've done.

CULVER: The saint of death.

CULVER (voice-over): Prison director Belarmino Garcia says many of these markings are steeped in ritual loyalty and violence, but officials insist they don't rely on tattoos alone.

Each inmate here, they say, has a file with a criminal history that goes back years.

CULVER: He said MS-13 active. And I said, what do you mean by active? He said, still a gang member.

CULVER (voice-over): Prison officials selected one inmate for us to speak with, Hector Hernandez. Under close watch by guards, he proudly showed off his tattoos.

CULVER: Why are you here in this prison?

For homicide. Cincuenta personas. More than 50 people.

HECTOR HERNANDEZ, PRISONER: Si.

CULVER (voice-over): Critics question the lack of due process. Officials insist they've done their due diligence, though they acknowledge not all inmates here have been convicted. But El Salvador's justice and public security ministry insists they can back up each case, in part thanks to this.

GUSTAVO VILLATORO, EL SALVADOR'S SECURITY AND JUSTICE MINISTER: They have one eight, means Barrio Dieciocho.

CULVER (voice-over): Public Security Minister Gustavo Villatoro shows us his personal gang intelligence book, 20 years in the making. It's now shared with law enforcement around the world, he says.

VILLATORO: We are giving support the police in Italy, Spain, in the U.S.

CULVER (voice-over): He says their focus is global and includes deportees. If someone in U.S. custody has ties to El Salvador, officials here say they're watching.

VILLATORO: Even in the book, you have separate.

CULVER (voice-over): While they won't comment on specific cases, Villatoro says they have extensive criminal records on alleged gang members who have yet to be caught.

VILLATORO: This information allowed us to catch them when U.S. and a deportation flight. We checked all of them. And if we found someone who we are very sure that he is a member of any gangs in El Salvador, we capture them and put in jail.

CULVER: You know exactly who's coming in on those deportation flights.

VILLATORO: Yes.

CULVER: So, did you specifically want those individuals to come back?

VILLATORO: Of course. Of course.

CULVER (voice-over): The minister continuously updates his findings and says he shares those records and other gang intel with U.S. law enforcement. The tactics used to track gang symbols here in El Salvador started outside prison walls, where ink can mean art or accusation.

ALEJANDRA ANGEL, TATTOO ARTIST: (SPEAKING FOREIGN LANGUAGE).

CULVER: What are you covering up? Thats what they say.

CULVER (voice-over): Cover tattoo artist Alejandra Angel says she once worried her ink might draw suspicion, especially after President Nayib Bukele launched a state of emergency in 2022 to dismantle gangs. She says her decision to cover an old design that she no longer liked raised questions, but nothing ever came of it.

Camilo Rodriguez, another tattoo artist, says police stopped him twice early on in the crackdown, asking what his tattoos meant.

[04:25:00]

CULVER: He said no longer are people fearing police when they have tattoos. He's actually seen more and more professionals, doctors, lawyers come and want to get tattoos done.

CULVER (voice-over): Camilo says officers here are now more informed, better trained, more precise. Inside CECOT, the country's violent past is etched into skin. Yet for those being sent back across borders, tattoos may not just hint at who they are, they can help decide where they end up.

CULVER: With my colleague Priscilla Alvarez reporting that the U.S. is now planning to send more deportees to right here in El Salvador, and eventually into CECOT, raises the question, is there enough space?

Now, the prison director told me on our tour that the capacity of the prison is about 40,000, and that they're nearing capacity at this point, but that there is still sufficient space. The public minister telling me that they are considering all options, including expanding and even looking into potentially building a second CECOT.

(END VIDEOTAPE)

SANDOVAL: Our thanks to David Culver for that absolutely fascinating look, both inside and outside of that prison in El Salvador.

Well, still ahead here on Early Start, U.S. investors breathing a sigh of relief this morning after Donald Trump decides to reverse course on his reciprocal tariffs. So how are markets reacting?

And also, a night of furious negotiation on Capitol Hill as a key vote on the budget bill is delayed by feuding Republicans.

(COMMERCIAL BREAK)

SANDOVAL: And welcome back to EARLY START. I'm Polo Sandoval in New York. Let's get you caught up on today's top stories.

Donald Trump says that he's ordered a 90-day pause on reciprocal tariffs, except for China.

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