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Early Start with Rahel Solomon

Federal Court Blocks Most of President's Global Tariffs; Stock Futures Surge After Court Blocks Most Trump Tariffs; Trump's Journey From Crypto Critic To Bitcoin Buff; Ukraine's Zelenskyy Agrees To $5.7B Arms Deal With Germany; WFP: Two Killed As Crowd Storms Gaza Food Warehouse. Aired 5-5:30a ET

Aired May 29, 2025 - 05:00   ET

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

[05:00:25]

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 Thursday, May 29th, 5:00 a.m. here in New York.

And straight ahead on EARLY START.

(BEGIN VIDEO CLIP)

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: This is one of the first times we have seen a court blocking Trump's ability to impose these global tariffs.

UNIDENTIFIED MALE: He can't just assert unlimited authority to tariff whenever he wants.

JOHN VAUSE, CNN ANCHOR: The next round of peace negotiations with Ukraine and Russia will be on Monday in Istanbul.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're going to find out whether or not he's tapping us along or not. And if he is, well, I respond a little bit differently.

TOM FOREMAN, CNN CORRESPONDENT: Crypto is a source of a huge fresh income stream for the Trump family.

J.D. VANCE, VICE PRESIDENT OF THE UNITED STATES: With President Trump, crypto finally has a champion and an ally in the White House.

(END VIDEO CLIP)

(MUSIC)

SOLOMON: All right. We begin this hour with that news out of a federal trade court right here in New York, blocking most of Donald Trump's global tariffs and potentially throwing his economic agenda into disarray.

The U.S. Court of International Trade ruled that the president does not have the authority to impose tariffs by declaring a national emergency, because the Constitution gives Congress the power to regulate international trade. Most, but not all, of Trump's tariffs have now been halted. The administration has already appealed, and the White House said in a statement, quote, deficits have created a national emergency that has decimated American communities, left our workers behind and weakened our defense industrial base. Facts that the court did not dispute.

It's not for unelected judges, it continues to say, to decide how to properly address a national emergency.

CNN's chief legal affairs correspondent Paula Reid has more now on the court's decision.

(BEGIN VIDEOTAPE)

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: This is one of the first times we have seen a court blocking his ability to impose these global tariffs. Now, this particular lawsuit, this was brought by a legal advocacy group that represents small businesses and claim that they have been severely harmed by these tariffs. And here, this is a very low profile court, as you noted, the U.S. Court of International Trade, they ruled in favor of a permanent injunction.

So, this is a permanent -- it's temporary, but it lasts until this case moves on injunction. So, this is -- effectively grounds Trump's tariffs to a halt. So, this is incredibly significant because we know that he uses these tariffs as a key part of his international trade, so-called deals and policies. So, to have this court block this with a preliminary injunction, this is surprising.

And as you noted, this is going to have an impact not only on his policies but on global markets.

Now, we have also seen the administration rail against the fact that any courts can block policies put forth by the administration.

(END VIDEOTAPE)

SOLOMON: Our thanks to Paula Reid there.

Now, after the decision, the senior counsel for the advocacy group that filed the case spoke with CNN, and he said that the courts decision was grounded in the U.S. Constitution, which gives Congress, not the president, power to regulate interstate and foreign commerce.

(BEGIN VIDEO CLIP)

JEFFREY SCHWAB, SENIOR COUNSEL & DIRECTOR OF LITIGATION, LIBERTY JUSTICE CENTER: This is a very, very important case, not only because of the tremendous economic impact that it has on everybody, but particularly businesses and our businesses, but also because of the tremendous power grab that the administration is claiming here. Obviously, the Constitution gives the power to tariff to Congress, not to the president. So, that means there's got to be some limit when Congress delegates that authority to the president, he can't just assert unlimited authority to tariff whenever he wants. (END VIDEO CLIP)

SOLOMON: And global markets rallied after the courts tariff decision, U.S. stock futures surged. The U.S. dollar was up as well.

Taking a look at where U.S. futures stand this morning at 5:03 still solidly higher, the Dow up about 460 points 1 percent, let's call it. The S&P, and the Nasdaq also up between 1.5 percent and 1.9 percent. You also have Nvidia earnings, which are sort of boosting sentiment as well, especially when you're looking at the Nasdaq.

And taking a look at markets in Asia, which also rallied on the ruling. Here's where they closed. Nikkei, Hang Seng and Shanghai all closing higher between about 7/10 of a percent for Shanghai to one point, let's call it 9 percent, rounding up for the Nikkei.

The Trump administration has ordered some U.S. companies meantime to stop selling software used to design semiconductors to China.

[05:05:01]

That's according to "The Financial Times". It says that the impacted companies include Cadence, Synopsis and Siemens EDA. The Commerce Department told CNN on Wednesday it is, quote, reviewing exports of strategic significance to China.

Let's get to China now. Lets get to CNN's Martha Stewart, who joins us now from Beijing.

Marc, great to see you this morning.

As we just pointed out, Asian markets moved higher on the back of this tariff news. But have we gotten any reaction yet from Beijing? What are you hearing?

MARC STEWART, CNN CORRESPONDENT: Good to see you, Rachel. We are indeed hearing from a government official who was posed a number of questions specifically relating to the tariffs. I just about 90 minutes ago Thursday afternoon now here in Beijing.

And the messaging from Beijing has been consistent from start to finish, if you will, basically, that there are no winners in a trade or tariff war and that protectionism doesn't help anybody. As far as where things will go in the future, that's a bit murky.

Now, obviously we have seen the United States use these tariffs as leverage toward China. Now that they're off the table, perhaps it changes the picture. But as we have seen, the United States has other economic tools. China also can play hard still if it wants to. Of course, it has a very healthy supply of rare earth minerals, which are so important in semiconductor production. So while this tariff aspect has been removed from the dialogue, it doesn't mean that these talks won't move forward and that they still may not be contentious.

But when we look at the broader picture, when we have the worlds largest economy and the world's second largest economy fighting with each other, it causes a lot of friction, not just with the U.S. and China, but around the world. But as you said, Rahel, looking at the numbers that we were just looking at together so far, the markets like it. But the future ahead, very murky, very cloudy. As to perhaps a bigger trade agreement between these two economic giants, Rahel.

SOLOMON: Yeah. Mark. And I mean, speaking about the future ahead, I mean, both sides had already agreed to this 90-day truce on punishing tariffs. That was obviously huge news around the world. But now, potentially, threatening relations. You have this announcement from Secretary of State Marco Rubio that the U.S. will quote, aggressively revoke visas for Chinese students. What more are you hearing there? What more can you tell us?

STEWART: Right. And this is not a surprise. Marco Rubio has very early on in his career, established himself as a China hawk. It's something that we saw when he was a lawmaker in Congress.

So, this theme is not a surprise. Obviously, this is a move that is being condemned by Beijing. It has viewed these exchanges as something very important between the two nations.

Let's listen to what a government spokeswoman had to say just about 90 minutes ago.

(BEGIN VIDEO CLIP)

MAO NING, CHINESE FOREIGN MINISTRY SPOKESPERSON: This politically motivated and discriminatory action exposes the lie of the so-called freedom and openness that the U.S. has always boasted and will only further damage America's own international image and credibility.

(END VIDEO CLIP)

STEWART: So this is something that Beijing has called unjust, saying it's under this idea of national security threats, national security concerns. Rahel, these exchanges, these academic exchanges, it was something that was a priority of administrations in the past. But obviously, in this new White House under Trump 2.0, it's something that seems to be very much up in the air, if not very much compromised right now.

SOLOMON: Yeah. And it impacts, I mean, hundreds of thousands of students. Marc Stewart in Beijing. Good to see you today. Thank you.

Elon Musk's time as a special government employee is coming to an end. A White House official says that the Tesla CEO was to begin the offboarding process Wednesday night. Musk had recently signaled that he'd be stepping away from politics to resume his duties at Tesla.

He thanked the president in a post on X, adding that the DOGE mission, quote, will only strengthen over time. His work in Washington will continue on despite his exit. House Speaker Mike Johnson says that the House is ready to act on recommended DOGE cuts as soon as the president makes a request to Congress.

U.S. Vice President J.D. Vance is urging cryptocurrency enthusiasts to channel their energy into politics in next years midterm elections. He spoke at a bitcoin conference in Las Vegas on Wednesday. Trump administration is leaning hard into crypto trend, but the president wasn't always such a fan, as CNN's Tom Foreman reports.

(BEGIN VIDEOTAPE)

VANCE: With President Trump, crypto finally has a champion and an ally in the White House.

TOM FOREMAN, CNN CORRESPONDENT (voice over): Vice President J.D. Vance came to Vegas to bet big on crypto at a major Bitcoin conference. With the help of two of the president's sons, he's telling folks the digital currency has a sizzling future.

VANCE: Crypto is a hedge against bad policymaking from Washington, against skyrocketing inflation, against a private sector that's increasingly willing to discriminate against consumers on the basis of their basic beliefs.

[05:10:06]

FOREMAN: Crypto is also the source of a huge, fresh income stream for the Trump family, which raised a variety of crypto products to the market to coincide with retaking the White House.

UNIDENTIFIED MALE: Do you have a ballpark estimate at this point on how much the Trump family seems to have made off of crypto?

UNIDENTIFIED MALE: At least $700 million.

UNIDENTIFIED MALE: Oh, that's not small.

FOREMAN: Only a few years ago, Trump trashed digital currency as highly volatile and based on thin air, noting, as many critics still do, that unregulated crypto assets can facilitate unlawful behavior, including the drug trade and other illegal activity.

TRUMP: Bitcoin, it just seems like a scam. I don't like it because it's another currency competing against the dollar.

FOREMAN: But now his administration is urging Congress and regulators to ease up on already scant crypto rules. Trump has the government buying Bitcoin for a national reserve and he just shared dinner with more than 200 of the top investors in his family's crypto offerings.

It's all raising sharp questions from critics about whether Trump is selling access to the presidency and keeping the change for himself, his press office bristles at the thought.

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: It's absurd for anyone to insinuate that this president is profiting off of the presidency.

FOREMAN: But dollar-by-dollar, day-by-day, Team Trump is pushing deeper into crypto.

VANCE: We want our fellow Americans to know that crypto and digital assets, and particularly Bitcoin, are part of the mainstream economy and are here to stay.

(END VIDEOTAPE)

FOREMAN (on camera): Of course, when Democrat Joe Biden was in the White House, Republican lawmakers were outraged over the very idea that anyone might profit from their connections to the president. But now that its Donald Trump and his family, theyre not saying much.

Tom Foreman, CNN, Washington.

SOLOMON: Thank you, Tom.

U.S. secretary of state says that the government will restrict visas for foreign officials responsible for allegedly censoring Americans. A statement from Marco Rubio said that in some instances, foreign officials who don't have the authority have nevertheless taken, quote, flagrant censorship actions against U.S. tech companies, citizens and residents. The statement also said that the U.S., quote, will not tolerate encroachments upon American sovereignty, especially when such encroachments undermine the exercise of our fundamental right to free speech.

It's not clear how the new policy will be applied, and also who will decide what amounts to censorship.

Well, still ahead for us, chaotic scenes in Gaza for the second day in a row, as desperate Palestinians scramble to get their hands on food supplies.

Plus, Ukraine agrees to a major arms package with Germany. But Volodymyr Zelenskyy may not have gotten everything he wanted to help his country fight Russia. We'll have the details on the deal in a report from berlin.

And later, the Florida Panthers are headed to their third straight Stanley Cup Final. Will there be a championship rematch with Edmonton? We'll be right back.

(COMMERCIAL BREAK)

[05:17:46]

SOLOMON: Welcome back.

U.S. Secretary of State Marco Rubio speaking with his Russian counterpart about peace talks with Ukraine. The State Department says Rubio reiterated President Trump's position that, quote, good faith dialogue with Ukraine is the only path to ending the war. Trump has grown increasingly frustrated at the state of the conflict, which he promises a candidate to end within 24 hours of taking office.

On Wednesday, he offered a short-term timeline for determining his next steps, one that he often gives when asked about pending decisions.

(BEGIN VIDEO CLIP) TRUMP: We're going to find out whether or not he's tapping us along or not, and if he is, well respond a little bit differently. But it will take about a week and a half or two weeks.

(END VIDEO CLIP)

SOLOMON: Russia's foreign minister says that the next round of peace talks with Ukraine will be on Monday in Istanbul. In the meantime, Ukraine's president has agreed to a new arms deal with Germany.

CNN's Fred Pleitgen has the details.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Germany appears to be drastically stepping up its military aid for Ukraine announcing a 5 billion euro aid package that covers not just giving Ukraine weapons and ammunition, but also combined production of weapons.

Now all this comes as President Vladimir Zelenskyy of Ukraine was here in Berlin to meet with German Chancellor Friedrich Merz. And during that meeting and after that meeting, it was thought that maybe Friedrich Merz would announce that the Germans would give cruise missiles to Ukrainians.

However, that was not the case. Instead, the German chancellor announced that there would be combined weapons productions by Germany and Ukraine for longer range weapons.

Here's what he said.

FRIEDRICH MERZ, GERMAN CHANCELLOR (through translator): We are financing a considerable part of the country's Starlink cover, and our defense ministers will today sign a memorandum of understanding on the procurement of long range weapon systems from Ukrainian production, so-called long range fires. There will be no range restrictions. Ukraine will thus be able to defend itself fully, even against military targets outside its own territory.

PLEITGEN: Now, a little bit more nuance about that was given by the German defense ministry. They said that the first batch of these weapons would be in Ukrainian hands within the next couple of weeks. Also, that no additional training would be necessary for the Ukrainian forces that are set to use these weapons. And at the same time, the Germans saying that they believe that a significant number of these munitions could be in Ukrainian hands before the end of the year.

So, certainly, that could drastically enhance Ukraine's capabilities of attacking targets deep inside Russian territory, which, of course, the Russians have said could potentially escalate the war in Ukraine. And the Russians also coming out and heavily criticizing this new measure by the German government, saying that the Germans and the French where, as the Kremlin spokesman said, in a race to escalate the war in Ukraine.

Fred Pleitgen, CNN, Berlin.

(END VIDEOTAPE)

SOLOMON: Now to another day of desperation in Gaza. As crowds of hungry people broke into a U.N. food warehouse, the food -- the World Food Program says that at least two people were killed and several others were injured.

Video from the scene shows people inside of the warehouse grabbing whatever they could find. Hundreds more were seen running outside as gunfire echoed in the background. Palestinian health officials say that one person was shot and killed in a separate incident at a food distribution site on Tuesday. The U.N. says that humanitarian needs have spiraled out of control after an 80-day blockade of all food into Gaza.

Let's get to CNN's Paula Hancocks, who joins us now from Abu Dhabi.

Paula, good morning.

After a chaotic first day of distribution at one site, we know that a second site has now been opened. What's the latest here?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Rahel, this is the controversial U.S. backed initiative which is trying to give aid at just four points in Gaza. Now they say that two were up and running at this point on Tuesday. We know that there was chaos at one of those areas. We heard from Palestinian officials, health officials, that one was killed, almost 50 were injured. And we heard from the Israeli military that they had fired into the air to try and calm the situation.

Now, the GHP, the Gaza Humanitarian Foundation, also admitted that they had pulled back momentarily to try and make sure there were no casualties, but it does appear there were. Now, what happened on Wednesday when a second area was opened, a second distribution site, we're getting conflicting reports. We're hearing from GHP that there have been no deaths. There has been no chaos. We're hearing from some on the ground that's simply not the case.

There is some confusion at this point, but we're hearing from GHP saying that eight trucks worth of aid were distributed. But we're also hearing from the U.N., from other NGOs, that this is simply not the way to be giving out this desperately needed aid in a -- in a far more desperate situation than we have seen before in Gaza.

We have heard from the World Food Program, as you mentioned there, their warehouse was broken into as desperate Palestinians tried to take what they could, flour and other things in that particular warehouse. And they have said that this emphasizes the alarming and deteriorating conditions on the ground, describing hungry people as carrying out the looting in that occasion, also saying that there needs to be an immediate scale up of food into the Gaza strip so that people are reassured that they are not going to starve. This, coming from the World Food Program. And we have heard repeatedly from the U.N., from other NGOs as well,

that what needs to happen is that the border crossings need to be opened and that a flood of aid needs to be allowed into the Gaza Strip.

Also criticizing the fact that from several hundred distribution points that the U.N. and other NGOs have around the Gaza strip, this would be brought to just four, where many people would not be able to reach an area in an active war zone. The elderly, the wounded simply wouldn't be able to get there -- Rahel.

SOLOMON: Paula Hancocks reporting for us there in Abu Dhabi -- Paula, thank you.

And still ahead, for us, American consumers are still spending and some retailers are posting positive results. But what happens if and when full tariffs hit? We'll talk with a retail expert after this short break. We'll be right back.

(COMMERCIAL BREAK)

SOLOMON: Welcome back.

The legal team defending Sean "Diddy" combs moved for a mistrial on Wednesday, which the judge denied. And the jury heard more testimony about Combs's violent actions aimed at his ex-girlfriend, Cassie Ventura.

CNN's Kara Scannell has more on the racketeering and sex trafficking trial in New York.

(BEGIN VIDEOTAPE)

KARA SCANNELL, CNN CORRESPONDENT: Deonte Nash, one of Cassie Ventura's best friends, was on the witness stand for several hours today. He testified about some instances he had seen a physical violence between Ventura and Combs. He was the personal stylist for Ventura and Combs at the time.

He testified there was one instance where combs arrived at Ventura's kitchen that Combs had argued with them. He told them that they needed to leave and was pushing them out the door. Nash testified that then he got in the car with Ventura and they left.

Combs followed. Combs instructed them to pull over. He said that they did, and Combs walked up to the car window and threatened Ventura, saying he would release sex tapes on the internet and also send them to her parents' employer so they would get fired.

Now, Nash testified that Ventura told him that it wasn't her and Combs on the tapes, but it was her and other men. Now, according to Nash.