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Early Start with Rahel Solomon

China Raises Retaliatory Tariffs on U.S. Imports to 125 Percent; Trump Envoy Steve Witkoff Arrives in Russia. Aired 4:30-5a ET

Aired April 11, 2025 - 04:30   ET

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

[04:30:00]

ANNOUNCER: This is CNN Breaking News.

POLO SANDOVAL, CNN ANCHOR: And welcome back to EARLY START. I'm Polo Sandoval in New York City, where we're following breaking news.

China just announcing that it's raising tariffs on U.S. imports to 125 percent. And a reminder, this comes after Donald Trump said on Thursday that the U.S. will place tariffs of at least 145 percent on imports from China.

As the trade war escalates, we're going to show you exactly what that's potentially doing to the markets before we take it to Asia.

For a more initial reaction, you see Asia-Pacific markets right now pretty mixed bag right now at the moment. And then in terms of U.S. stock futures, the Dow, Nasdaq and S&P 500 futures all down as the U.S. market is set to open hours -- in a matter of hours, certainly hoping for a rally at the end of the trading week. But certainly going to have to see when that happens.

But first, more immediate breaking news that we just mentioned right now. Let's bring in CNN's Mike Valerio who's live in Seoul. Mike, we've been talking about this all morning.

We've heard from experts, some of them not really surprised. And a quick reminder, before that retaliatory tariff on U.S. imports was 84 percent, China in the last hour announcing it will be 125 percent. What do you think the reaction will be where you are?

MIKE VALERIO, CNN CORRESPONDENT: Well, you know, let's talk about just that 125 percent level. And this is the real breaking news beyond that number, Polo. The statement from Beijing is suggesting that China will stop at 125 percent, the tariff level for the United States.

Beijing's suggesting that it will cap its tariff level at 125 percent, not go higher, because to move it any higher from the viewpoint of Beijing in the statement that just came out would be useless. So let's go with the translation that we are working with here in this corner of the world in CNN, Polo. I'm going to read part of it.

And Beijing is saying this: Given that at the current tariff level -- now 125 percent -- there is no market acceptance for U.S. goods exported to China -- meaning market goods are not viable, exported from the U.S. to China -- if the U.S. continues to impose tariffs on Chinese goods exported to the U.S., China will ignore it.

So, again, that is suggesting that China will ignore any potential further tariff increases by the United States.

[04:35:00]

So what does this mean? It suggests that China may be ending its tariff toolkit and, Polo, moving on to another toolkit. And that could mean, and I stress could, mean some of the following.

Buying soybeans, for example, not from the American heartland, but buying more soybeans, critical to the Chinese economy, from Brazil, a friendlier economy to China. Cutting off all exports of rare earth minerals to the United States. Critical minerals that are needed for semiconductors, for production of, you know, the internal workings of coal, cars and computers, you name it.

Also, potentially what China could do, aside from raising tariffs, now that it has suggested that it's going to stop, dumping T-bonds. And that is one of the underpinnings of the American economy. Treasury bills and U.S. debt, a huge portion of which is held by China. And when we're talking about trouble and turmoil in the U.S. bond market, that's one of the reasons that President Trump pulled back on that huge poster board of tariffs for most of the world that he announced in the Rose Garden the other day.

30-year treasury yields are now at 4.95 percent, the largest weekly increase seen since 1982. Ten-year treasury yield, for that matter, at 4.5 percent. It was around 4.28 percent a day earlier. And why we mention that is because in usual times, investors flock to the safety of treasuries. And those yields usually go down.

But now we're seeing the opposite. We're seeing investors saying, you know what, we're losing all of this money in equities. Let's sell our treasury bills to make up for those losses.

And also, frankly, a lot of investors are saying the trustworthiness, for lack of a better word of saying it, that the United States used to hold may not be there anymore. So T-bills may not be the safe haven that they once were.

So this is striking that Beijing's suggesting that it will cap its tariff levels against the United States at 125 percent. But that opens the question now, what else could Beijing do as it has indicated that it is not backing down -- Polo?

SANDOVAL: I'm so glad you mentioned that. We have seen that as a negotiating tactic with other countries saying, well, then we can simply shop elsewhere, go somewhere else. And also, as a superpower, convince its allies in Asia to do the same.

So perhaps that's an even bigger threat than 125 percent tariff. And I'm so glad you explored that. Mike Valerio in Seoul, thank you so much for that immediate reaction and for that analysis, appreciate you.

VALERIO: Appreciate it.

SANDOVAL: All right, stick around, more EARLY START after the break.

[04:40:00]

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN Breaking News.

SANDOVAL: And welcome back. We want to get you to more breaking news, this time out of Russia.

Top Trump administration official, Steve Witkoff, has arrived in that country. That's according to Russian state media. CNN International Diplomatic Editor Nic Robertson is back with us, joining us from London.

Nic, we've seen, some can call it, meaningful results whenever Witkoff is on the ground. We all remember the ceasefire deal in Gaza. In this particular case, what is his objective now that he's in Russia? What is he trying to do?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, this will be part of the continuum of President Trump trying to get a ceasefire in Ukraine. He's got a unilateral -- without a provisos agreement from the Ukrainians to agree to the ceasefire, but he hasn't got that from Putin so far. Putin's holding out that he wants various sanctions lifted from specific banks.

Putin is also appearing to desire to have control and say over, potentially, he's indicated, a future Ukrainian government, potentially over which troops could come into Ukraine and which troops couldn't as part of a security force to bolster Ukraine.

So Putin is a holdout on what Trump wants, which is a without constraints agreement to get into proper ceasefire discussions. So it would appear that Witkoff is en route to continue that effort.

It's interesting that Witkoff over the weekend in Washington last weekend met with President Putin's key envoy, Kirill Dmitriev, and that also seemed to pave the groundway for that prisoner exchange that we saw yesterday. Ksenia Karelina, the American ballerina, released, landed on US soil about 11 p.m. last night after being held in Russia on charges that stemmed from her giving a donation of $50 to a pro- Ukrainian group, a Russian-American citizen there. So she has been released.

So it all points to, if you will, an improvement in the nature of the relationship. However, the details of how that's improving and if it is moving Putin towards the type of ceasefire pause and negotiations that President Trump is calling for, we know that President Trump over recent weeks has expressed some frustration with President Putin. The amount of airstrikes and civilians that are being killed over the past month or so in Ukraine specifically drawing President Trump's ire, not convinced that Putin is a reliable partner on this but continues to push forward.

You know, in the narrative of Russia-U.S. relationships, I think you can say it's improving. But how much, how far is it going to deliver what Trump wants? You could also interpret it as, you know, Putin continues to be able to play out these discussions and negotiations to continue to try to extract concessions from the United States.

Witkoff, this will be -- he met just a month ago, barely, with President Putin when he was in Moscow. So there's a relationship that's established. But is it one that's really going to benefit the United States?

And certainly in Ukraine, there'll be questioning if it will benefit them.

SANDOVAL: And Nic, just off of that last thing that you mentioned, just to really underscore the significance of this meeting that you're following, how much authority does Witkoff bring with him from Washington to Russia?

ROBERTSON: He appears to be President Trump's principal go-between on all issues related to foreign affairs. He seems to be more engaged and more on point and more on Trump's message than perhaps Marco Rubio, the Secretary of State, who would be, you know, traditionally the U.S.'s effective top diplomat in these types of negotiations.

[04:45:04]

Witkoff, a businessman like Trump, appears to have the trust and faith of Trump to be able to deliver in a way that Trump would want to try to deliver and communicate messages in perhaps a way that Marco Rubio isn't given that latitude. We've seen instances where Rubio has sort of misread what Trump has been saying, not least about Trump initially talking about telling, you know, 2.1 million Palestinians in Gaza that they needed to leave. Rubio a day later had said, well, that's not quite the case.

Well, then Trump came back and said, more or less, yes, it is the case. He might have changed the narrative now.

But Witkoff really appears to be Trump's principal international go- between, a businessman now turned perhaps the world's leading diplomat.

SANDOVAL: It really is a unique dynamic. Nic Robertson, thank you so much for following that meeting, and we'll check back with you as it unfolds.

Meanwhile, the United States is being criticized for its response to the deadly earthquake in Myanmar, the first major natural disaster overseas since the Trump administration moved to dismantle the main U.S. humanitarian aid agency. More than 3,500 people died in last month's huge earthquake, which toppled buildings across the impoverished war-torn Myanmar. It happened while Trump and his administration gutted the U.S. aid agency, slashing life-saving programs and even cutting off staff. The U.S. pledged $9 million in assistance and dispatched just three

people to Myanmar. In fact, they were laid off within days after arriving in that country. Just look at how that compares to the American response to a similarly sized earthquake that struck Turkey and Syria just two years ago. The U.S. president at the time sent hundreds of workers and pledged $185 million in assistance. So quite the contrast.

More EARLY START after the break. Don't go anywhere.

[04:50:00]

(COMMERCIAL BREAK)

SANDOVAL: Well, if you blink, you might miss him. He's a homegrown teenage sprinter in Australia that he has broken the 10-second barrier in the 100-meter race. Not once, but twice in just a single day.

17-year-old Gout Gout. He clocked a stunning -- get this -- 9.99 seconds in the 100-meter heat at the Australian Athletics Championship in Perth, Australia on Thursday. Then he recorded the same exact time in the final.

Unfortunately, neither time will count as his official personal best, as both were assisted by what were being described as illegally high tailwinds. Yes, they're such a thing. The Queensland native looks to have a very bright future, though, already drawing comparisons with legendary sprinter Usain Bolt.

He'll be running at the same track in the 200-meter race on Sunday. Gout said that he couldn't be happier with the results. He should.

Also, happiness awaits a lucky golfer in Georgia, where the quest for the coveted green jacket has teed off, with American Justin Rose grabbing a three-stroke lead at the Masters. Three golfers, including defending champ Scotty Scheffler, are bunched up in second place. And also Rory McIlroy is far back at the first major of the season.

CNN Sports Don Riddell with the latest out of Augusta.

(BEGIN VIDEOTAPE)

DON RIDDELL, CNN WORLD SPORT ANCHOR: The 44-year-old Englishman Justin Rose has had a phenomenal day here at Augusta, shooting a seven-under par score to open his Masters tournament challenge here in 2025, leading by a comfortable margin.

Now, he is one of the most respected players in the game. He's a former US Open champion. He's an Olympic champion. He's had chances here, most notably in 2017, when he lost a heartbreaking playoff to Sergio Garcia. But he's comfortable here. And he knows that he's still got the game to win a green jacket.

JUSTIN ROSE, FIRST ROUND LEADER AT -7: I feel like I've played well enough to win this tournament. I just feel like I don't have the jacket to prove it. I think you always feel self-pressure to add more, for sure.

I do feel that I could make a statement with how well I play in the back end of my career. That's a great opportunity, though, for me, not a pressure. From my point of view, that's a lot of fun today and that's what I'm in the game for, is to feel these experiences.

RIDDELL: Of course, there are still three rounds to go here at Augusta. And one of the men breathing down Justin Rose's neck is surely going to be Scotty Scheffler. The world number one and defending champion is hoping to become only the second player after Jack Nicklaus to win three green jackets in the space of just four years.

And he played superbly on Thursday, shooting a four-under par round. And he didn't drop a shot.

SCOTTIE SCHEFFLER, TWO-TIME MASTERS CHAMPION: I would have felt pretty good about it. I had a feeling the golf course was going to get pretty firm. And you know, the areas to hit your irons out here are pretty small. And they get even smaller when the greens are firm. And so there's definitely some challenge to the golf course today. And I'm sure that'll continue as the week goes on.

I think any time you get closer to the lead, it's going to be easier for you to win the golf tournament. That's just a simple fact of the matter. You're going to have a good start. Statistically, you're going to have a better chance to win the tournament.

RIDDELL: But unfortunately, not everybody plays well at Augusta. It is a brutal test of golf. And spare a thought for the 21-year-old American Nick Dunlap. He turned professional just last year. This is only his second Masters appearance. And he had an absolute disaster, shooting an 18-over par score of 90. That was more than twice as bad as the next worst score here on Thursday. He had a very, very difficult round. And I'm sure he can't wait to get back out here on Friday and try to do a lot better.

That will have been a really painful experience. Back to you.

(END VIDEOTAPE)

SANDOVAL: Britian's Prince Harry took an unannounced trip to Ukraine as part of his work with wounded veterans. He visited the Superhuman Center in the western city of Lviv. The orthopedic clinic provides care and rehab to military personnel and civilians for free.

[04:55:00]

Harry was joined by veterans from the Invictus Games Foundation. That's a charity behind the international sporting event that he helped start for military personnel wounded in action. You recall that the Prince spent 10 years in the British Army. And he's made helping injured soldiers one of his most prominent and important causes.

Now to a small and major breakthrough, a tiny piece of technology crafted by engineers at Northwestern University near Chicago. It will soon be offering new hope to heart patients. Here's CNN's Jacqueline Howard.

(BEGIN VIDEOTAPE)

JOHN ROGERS, PROFESSOR OF BIOMEDICAL ENGINEERING, NORTHWESTERN UNIVERSITY: About the same size as a sesame seed.

JACQUELINE HOWARD, CNN CORRESPONDENT (voice-over): They're calling this the world's smallest pacemaker. Engineers at Northwestern University developed the device to be so miniscule that it fits inside the tip of a syringe. And it can be injected right into a patient's chest. So no invasive surgeries needed.

The pacemaker itself is light sensitive. It works alongside this small patch stuck to the skin. When an irregular heartbeat is detected, it flashes. That light activates electrodes on the pacemaker and then sends electrical impulses to the heart, helping to control and correct the pace of the heartbeats.

While this tiny pacemaker can work with a heart of any size, it might especially benefit newborn babies with congenital heart defects as they recover from serious heart surgeries.

ROGERS: Post-op recovery can be daunting, especially for infants who undergo that kind of surgery.

HOWARD (voice-over): The pacemaker isn't meant to be worn for life.

ROGERS: It will dissolve away over a period of six to nine months completely.

HOWARD (voice-over): For now, this tiny piece of technology is still an experiment. But one day, it could make a big difference for our youngest, tiniest heart patients.

(END VIDEOTAPE)

SANDOVAL: Thank you so much for watching EARLY START. I'm Paulo Sandoval. We will have more of today's top stories coming up after the break.

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