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Early Start with Rahel Solomon

Stocks Tumble as Trump Clarifies Higher Tariffs on China; China's Leader Addresses Trade War; U.S. House Approves Budget Blueprint to Unlock Trump Agenda; Deadly New York Helicopter Crash; Russian-American Ballerina Freed. Aired 4-4:30a ET

Aired April 11, 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 watching from around the world and those of you streaming on CNN Max. I'm Polo Sandoval in for Rahel Solomon and you're watching EARLY START.

Just ahead of the next hour, Not Afraid. China's leader gives his first public comment since the beginning of the trade war with the U.S.

And in the U.S., a helicopter crash claiming the lives of six people in New York City. Probably what we're learning about the victims, some of them children.

And finally, free, a Russian-American ballerina back on U.S. soil. You see her there stepping off a plane after a prisoner swap with Moscow. More on this reunion.

And good morning to you. We begin this hour with the first public comments from Chinese President Xi Jinping on Donald Trump's trade war.

During a meeting in Beijing, the Chinese leader said that there are no winners in a tariff war and going against the world will only lead to self-isolation. Now that comes as President Trump clarified on Thursday that Chinese goods coming into the U.S. will actually be subject to at least a 145 percent tariff, not a 125 percent tariff, as initially mentioned by the administration.

Meanwhile, we are keeping a very close eye currently on markets and look into the future here. U.S. futures showing at least some negative, at least very little gain there. And so we'll certainly have to see where the markets lead in the coming hours, just a few hours of the opening bell.

And meanwhile, Asia-Pacific region trading wrapping up for the day. You see they're also a mixed bag with at least a half a percentage point lower in South Korea. And Nikkei, probably really getting hit the hardest there with nearly three percentage point loss.

President Trump told reporters that he was not paying attention to some of these markets. Those are some of the remarks that he shared on Thursday.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I haven't seen it because I've been here for two and a half hours. So I'll be saying that -- I think Scott, do you want to have a statement on it?

SCOTT BESSENT, U.S. TREASURY SECRETARY: Sure. Look, the up two, down one is not a bad ratio or up 10, down five.

(END VIDEO CLIP)

SANDOVAL: They're staying positive in the White House Cabinet Room. CNN's Mike Valerio, live in Seoul, South Korea, and our international diplomatic editor, Nic Robertson, is in London. Nic, first to you, we're a volatile week for shares nearing an end.

Do Europeans where you are have any hope of closing the week off with some of yesterday's gains?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: The indications are today, the CAC up just, FTSE 100 up just, the DAX up just. The main markets starting the day in positive territory, at least they were just about 10 or 15 minutes ago, whether it will remain that way, it's really unclear. And it's interesting that we're hearing from President Xi today, reaching out to the European Union as a possible partner for improved trading in the light of President Trump's massive tariffs on China.

It's interesting because Ursula von der Leyen, the European Commission president yesterday did speak about putting the reciprocal tariffs that the European Union was going to consider and had decided on for steel and aluminum to sort of put those on hold for 90 days while it monitors what President Trump does next. But also made the point that while they're on hold, the decision has also been taken for how the European Union will reciprocate. It's also considering how it will reciprocate on the 25 percent tariffs on the auto sector and also on this horizontal 10 percent tariff as well, which is still in place, smaller than it was on Europe.

But the takeaway point from her was that the European Union will look to other markets and in that context, that's perhaps part of the context where President Xi is sort of reaching out there. No response from Ursula von der Leyen or any senior European Union officials on that.

[04:05:00]

It is interesting, however, that this week the British trade secretary was in China. The Britain's top military official was in China, unannounced visit this week. Government officials say that these were pre-planned.

But you know, in this new environment of not just economic uncertainty but security uncertainty, the idea that President Xi is tempting Europe to rethink, rekindle, redo a relationship with China is not one that's going to fall on deaf ears.

Obviously, they know European Union economic markets, security chiefs, will know all the pitfalls therein. But as far as the markets go today, at the moment, you know, a not negative start but not hugely positive either.

SANDOVAL: Nic, watching the markets in Europe. Mike, to you now in Asia, as we just mentioned a little while ago, we finally heard from Xi Jinping out with some of those new comments. A reminder to our viewers, this is the first time that he addresses this tariff war.

What is the news where you are after hearing from the president as it relates to any possibility of a deal with the U.S.? Do they plan on pulling up a chair to the negotiating table as Trump wants?

MIKE VALERIO, CNN CORRESPONDENT: And, Polo, the short answer to that is no. And as we get into the details, you know, Pedro Sanchez, the Prime Minister of Spain, is over on this side of the world. So he was meeting with Xi Jinping today in Beijing.

And as we're parsing through the comments, another line I want to add to the lines that you were just quoting from the beginning of the show, Xi Jinping is saying, quote, China and the EU should work together to oppose unilateral bullying, as Nic was alluding to a couple seconds ago. So nowhere in these comments are Xi Jinping saying, you know what, I am going to pick up the phone and talk to Donald Trump. This has gone on long enough.

China has been preparing for this moment for years. But something that could hasten perhaps Washington to move here, that would be the turmoil in the U.S. bond market. If we throw up the graphic, 30-year treasury yield, up to 4.95 percent, the largest weekly increase since 1982, according to Reuters and our own John Liu, who is crunching the numbers in our bureau in Hong Kong. And why that matters is because when historically the stock market tanks, investors always head to the safe havens, which are T-bonds, bonds, treasury bills. And that is not happening here. People are selling their treasury bonds.

People are trying to -- try to make up for the losses that they've had in equities. And they don't necessarily trust the safe haven that this has provided, in the word of the U.S. government, in times before the Trump administration, 2.0.

So talking about the emotions of all of this, we have two sound bites we're going to hear first from Janet Yellen, the former U.S. Treasury Secretary under the Biden administration. That is budded with Kevin O'Leary, who is a huge Trump ally.

And you might recognize him from being one of the hosts of Shark Tank. Let's listen to both of them.

(BEGIN VIDEO CLIP)

JANET YELLEN, FORMER U.S. TREASURY SECRETARY: This is the worst self- inflicted wound that I have ever seen an administration impose on a well-functioning economy. KEVIN O'LEARY, CANADIAN BUSINESSMAN AND CO-HOST, SHARK TANK: What Yellen forgot to tell you there is China does a lot of IP theft and has for decades, has never, ever been compliant with the WTO since 2000 when they went in. And the amount of theft they do in Europe and the United States in terms of IP and then produce those products and sell them back in those markets at discounted prices because they don't have to pay for R&D, it's beyond abusive.

(END VIDEO CLIP)

VALERIO: So Polo, where this is going, President Xi is visiting Vietnam, Malaysia, Cambodia next week, dates that are exact on the calendar to be determined. But that is the schedule that came out from Beijing about two hours ago.

So this is an effort for Beijing to try to rally nations, in addition to the EU, to work a little closer with Beijing to fight or at least somewhat stand against these U.S. tariffs, most of which are on pause, with the notable exception of that whopping 145 percent tariff on Chinese goods -- Polo.

SANDOVAL: Yes, that clarity coming from the Trump administration that it is in fact on 145 percent. Thank you both so much for this insight. Nic Robertson, Mike Valerio, thanks, guys, have a good day.

Let's get some analysis now from Kit Juckes. He's the global head of FX Strategy at the financial services firm Societe Generale. He joins me now live from London. Kit, thank you so much for taking the time and joining us on the program.

KIT JUCKES, GLOBAL HEAD OF FX STRATEGY, SOCIETE GENERALE: It's a pleasure.

[04:10:00]

SANDOVAL: Looking over some of your analysis and some of your background here, a few decades, shall we say, of studying economics under your belt -- if we still have you, Kit, hopefully we still have you. And yes, we do.

Help me and our viewers better understand how this trade war may eventually affect the dollar strength.

JUCKES: Well, you know, the first impact was obviously the dollar is extremely strong at historically very elevated levels because the rest of the world has been buying U.S. assets with huge amount of enthusiasm for years. That's the other side of the U.S. trade deficit is, you know, China, Germany, the big, big, big owners of -- big exporters to U.S. have been buying lots of treasuries, buying lots of U.S. equities.

And the danger is with this trade war is that although, you know, kind of old fashioned trade theory would say the dollar strengthens as a result of import tariffs, if what you do is you reduce the outlook for the profits of U.S. companies, if you reduce the appetite of foreigners to U.S. assets, you're going to end up getting potentially an outflow. And you see that now with people beginning to sell U.S. treasuries and the relationship between U.S. rates and the dollar falling apart.

SANDOVAL: I want to ask you another question here about the U.S. imposing tariffs on other countries. What could be a potential positive here for the dollar?

JUCKES: Well, the potential positive for the dollar, to me, is that a weaker dollar makes the U.S. more competitive in manufacturing industries. I think that's the that's the piece that perhaps the president wants. And in fact, if you if you want to boost U.S. auto production or you want to boost the bits of the U.S. economy that have been left behind, then you don't necessarily want to have the world's strongest currency. And it's been going up for years now since the since, you know, since 2010, it's made huge gains.

So the positive is that a weak dollar is not necessarily a bad thing for the U.S. economy. The difficulty for me in that sense, though, is how you avoid weaker economic growth at a time when a country dependent on foreign investment inflows is chasing them away.

SANDOVAL: Kit, while I have you -- and this is actually some information that we just received right now from the State Council Tariff Commission saying in a statement a short while ago that China will be raising retaliatory tariffs on U.S. imports to one 125 percent. This is information that's just coming into CNN right now, again, citing the State Council Tariff Commission.

I'm curious what your immediate reaction is with your expertise. This counterstrike, shall we call it, from China directed at at the U.S. business market.

JUCKES: It's not so surprising, you know, in the sense that they'll do they'll do the same. The key, of course, is that the U.S. is the big importer. The Chinese don't import anything like as much from the United States as the United States imports from China.

So other countries come back with a tariff response. But the whole starting point from this in the United States is we're running a massive trade deficit and we don't run big surpluses with anybody. So we can raise tariffs on you. And if you retaliate, it has less impact on us on that. So I'm not massively surprised. It just keeps the whole thing that the chance of quick resolution and of us getting back to a world of free trade seem to be fading and there will be a negative growth effect around the world that we're not. It's going to be hard to avoid now.

SANDOVAL: Fascinating. And finally, I'm curious, what are some of those factors that -- and speaking of foreign investment -- what are some of those factors that can tend to scare foreign investors away from U.S. assets? Is it this this talk of tariffs?

JUCKES: No, I think it's it's -- look, it's if the tariffs reduce the profitability of U.S. companies, do I need to own so many of my U.S. equities that have done fantastically? Am I worried that if the Chinese decide they no longer want to hold U.S. treasuries to the size that they used to, that I'm going to cause a loss of the U.S. treasury markets? Really important status as the safest asset in the world and the rise in U.S. yields. Some of it reflects weaker demand. So people are going to pay much more attention to treasury auctions going forwards from here.

But but, you know, another part of it, quite simply, is we know foreigners have accumulated $65 trillion worth of U.S. assets. That's a lot of your money to have parked in one place. And if you're worried that the U.S. is withdrawing into itself a little bit more now, maybe you want to lighten up and put some of it somewhere else if you can.

SANDOVAL: We've got to leave it there. Kit Juckes, thank you so much for your expertise. We're really glad that we have that insight. Appreciate you.

JUCKES: Thank you.

SANDOVAL: Anytime.

All right, now to a major win for Republican leadership after it subdued a rebellion among its members, the U.S. House approved a Senate budget plan on Thursday and a critical step forward for President Trump's agenda.

[04:15:00]

But the House speaker had to convince some holdouts in his own party to actually get there. More on this deal from CNN's Manu Raju.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: After a furious effort by the House Republican leaders, they ultimately got what they wanted, which is the narrow passage of a budget blueprint that will set the stage for moving on the larger Trump agenda.

Now, this came after weeks of wrangling behind the scenes and really an intense 24 hours as the Speaker of the House, Mike Johnson, met with a number of conservative holdouts, pressuring them to get in line behind the bill, making some promises, particularly over the issue of cutting federal spending. There had been a disagreement between House Republicans and Senate Republicans about how deep to go in terms of spending cuts.

And they've won some assurances, verbal assurances, that when they move on the larger plan, that ultimately they would seek about $1.5 trillion in spending cuts. And ultimately, that got enough Republicans on board to get this over the finish line. A least this first step over the finish line by 216 to 214 votes, two Republicans voting against it. Really no margin for error for the Speaker of the House to get this over the finish line.

Now, in catching up with some of these members afterwards, they are warning that the next step of the legislative process must lead to a legislation that does not deviate from those assurances, must cut federal spending by that amount, $1.5 trillion, even as some Republicans are concerned about cutting that deeply.

RAJU: And if it comes back with reconciliation bill less than 1.5 trillion?

REP. RICH MCCORMICK (R-GA): It's not going to get done.

RAJU: You're not going to vote for it?

MCCORMICK: I promise you have not just just me. You'll have 30 people that won't vote for it.

RAJU: You'll vote against anything that comes back on a reconciliation bill under one point five trillion.

REP. ANDY OGLES (R-TN): That's right. We've got to hit that target. That's again, this is why President Trump won. We've got to hold our word, hold leadership their feet to the fire.

RAJU: Are you confident that Medicaid will not be touched as part of these cuts?

REP. NICOLE MALLIOTAKIS (R-NY): Well, we've made it very clear to the speaker that we will not support something that changes eligibility that would strip benefits from our constituents. It's as simple as that. I don't really believe that the number will be 1.5 trillion. I think that it probably will come in a little lower.

RAJU: And again, this is just the first step in the process. The passage of this budget blueprint is just something that allows them to move ahead with the actual details of the legislation. They have to actually draft those details, which not only includes the spending cuts, where are those cuts going to come from? That's one question.

But also the issue of a major overhaul to the U.S. tax code. That is such a complex and huge undertaking that they are still weeks away, perhaps months away from getting anywhere close to resolving as well as a significant amount of money to carry out Donald Trump's immigration enforcement measures, in addition to more projects for energy drilling, oil drilling and the like. All those will be part of this legislative package.

And one other key thing here as well, raising the national debt limit for two years. That's what Donald Trump wants, to avoid a debt default and not to have to negotiate with Democrats. So all these complex issues must be rolled into one package, must get Republicans on board because we expect every Democrat to vote against it.

And with the narrowest of margins in the House and the Senate, it's going to be an enormous undertaking to get it done. But the Speaker at least can breathe a sigh of relief that the first step is done. But many more steps to go for this can ultimately become law.

(END VIDEOTAPE)

SANDOVAL: All right, thanks to Manu Raju on Capitol Hill.

And still to come here on EARLY START, what we know about the victims of a tragic sightseeing helicopter crash in New York City.

Plus, a Russian-American ballerina now back on American soil, reunited with some of her loved ones after the Trump administration completed its second prisoner swap in Russia. More details on that exchange coming up.

[04:20:00]

(COMMERCIAL BREAK)

SANDOVAL: And right now, we are learning more about Thursday's deadly helicopter crash here in New York City in the Hudson River. A law enforcement official says that it's Siemens executive Agustin Escobar and his family, that they were among the six people who were killed in the crash. Three of them were children.

We'll get to CNN's Brynn Gingras' report in just a few moments. But first, a warning that some of the video that you're about to watch is difficult to see as it shows the final moments of that helicopter before it crashed.

(END VIDEOTAPE)

BRYNN GINGRAS, CNN U.S. NATIONAL CORRESPONDENT: Federal authorities, the FAA, the NTSB, now part of this investigation trying to determine what caused that helicopter to go into the water. We know that there were a number of 911 calls into emergency officials describing how pieces of that helicopter were coming off of the body before it actually submerged into the water. We also learned from officials that the helicopter went into the water upside down, meaning that cabin was facing up, likely helping first responders get to those six people who were on board.

But of course, no one survived this crash. Six people on board, a pilot and a family of five who was visiting from Spain. Three of those people were children.

What we understand is that they took off from a downtown heliport for a tourist ride along the Manhattan skyline, which is so common here, of course, in New York City. They headed north, likely looking at the Statue of Liberty coming north along the skyline to the George Washington Bridge and then turning back and following the New Jersey side of the Hudson River before crashing into the water. We believe that the helicopter was in the air for a total of 16 minutes.

Again, this investigation very much still underway with no answers as to what caused this crash.

Brynn Gingras, CNN, New York, back to you.

(END VIDEOTAPE)

SANDOVAL: Thank you, Brynn.

A Russian-American woman convicted of treason in her homeland is back in the U.S. after being related -- rather, released as part of a prisoner exchange with Moscow. Ksenia Karelina, she arrived at Joint Base Andrews near Washington, D.C. late Thursday. You see her family waiting outside that plane with plenty of hugs and plenty of flowers as well.

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She'd been serving a 12-year prison sentence in a Russian prison for making a very small donation to a charity group that was supporting Ukraine. She was swapped for a dual Russian-German citizen who had been accused of smuggling and money laundering to help Moscow's war against Ukraine.

The prisoner swap happened as U.S. and Russian officials met in Istanbul to discuss embassy issues. The State Department saying that the two sides continued their what they described as constructive talks in the second meeting. They're trying to reach an agreement on the U.S. embassy in Moscow, which Secretary of State Marco Rubio says barely operates because it's been denied access to the banking system and also it's been prohibited from employing local staff. The U.S. embassy had to lay off nearly 200 local employees in 2021 due to Moscow's restrictions. The two sides discuss holding follow-up talks in the near future, hoping to increase that consular presence. The Trump administration is restricting access to the president's highly classified daily intelligence briefing. That's according to five sources familiar with the move. This is due in part to leaks of the report during Trump's first administration. CNN's Katie Bo Lillis with more.

(BEGIN VIDEOTAPE)

KATIE BO LILLIS, CNN REPORTER: So Trump administration officials plan to do this really from the earliest days of his administration. Initially, it was White House Chief of Staff Susie Wiles who was approving who got on the list and who didn't. And then subsequently, Tulsi Gabbard confirmed as the director of national intelligence and she took over the process.

Look, the lesson Trump really took away from his first term when information that had appeared in the PDB sometimes appeared in press reporting was that the he believed that the intelligence community was trying to weaponize analysis and reporting by leaking it and using it to try to box him in and undermine him.

So there's a sense among officials that we spoke to about this move that Trump was really determined not to let that happen again. And you're seeing this in both the intense determination to have people he sees as true MAGA loyalists in key positions and a really intense tightening of who has access to what information.

Now, it's not at all unusual for new administrations to rejigger who has access to the PDB. Most new administrations come in. They move to limit the number of people who can see it. Then folks petition to get added back on. They say, oh, I really need to see this for my job. And the list kind of changes a little bit over time. All of this is really normal. But inside the intelligence community, this move is really being seen

against the backdrop of what one U.S. official described to us as ongoing large distrust issues between the Trump administration and career intelligence officials who believe this is really part of his effort to kind of bring to heel what he and his top officials see as subversive elements inside the I.C.

So why does this matter? What does it mean?

There's an argument that we heard from some formal officials that by restricting access to the PDB, you could build the president's confidence that the analysis and reporting will remain private. And that might in turn allow analysts writing for the PDB and presenting it to him to be really straightforward about what the I.C. thinks. That's a good thing, according to former officials.

But it's also possible that if you tighten access too much, you might have senior national security officials who are operating off of a slightly different operating picture. They'll still get a lot of the same intelligence. But the PDB is a really important level setter about what the intelligence community thinks.

And if they're getting subtly different interpretations or analysis of the intelligence, that might lead to an inconsistent or disorganized foreign policy. And that, of course, would be bad. A lot of this depends on who still has access. And we don't know that.

(END VIDEOTAPE)

SANDOVAL: Still ahead here on EARLY START, we're going to get you some breaking news in the U.S. China trade war as China raising the stakes and raising its retaliatory tariffs on the U.S. just in the last hour. We'll get you those details.

Plus, what to expect when the U.S. stock market opens up in nearly hours.

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