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Early Start with Rahel Solomon

A Look At Global Trade In 2025; DOJ Discovers A Million More Possible Epstein Files; New Law To Resolve Pet Custody Battles In Mexico. Aired 5:30-6a ET

Aired December 26, 2025 - 05:30   ET

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

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[05:32:50]

RAHEL SOLOMON, CNN ANCHOR: Welcome back to EARLY START, and this is your business breakout.

And let's take a look and see where U.S. futures stand ahead of the opening bell on Wall Street -- a sleepy start, at least at 5:30, when markets reopen in a few hours. Investors continue to hope for a bit of Santa Claus rally these last few trading days of the year. Will Santa deliver? Stayed tuned and we'll see.

Checking on some of the other business headlines today, gold is on track to have its best market year since the late 1970s. U.S. futures have skyrocketed more than 70 percent this year and some analysts expect prices to keep rising. Gold, considered a safety net or safe haven in times of uncertainty, maintaining its value despite market fluctuations caused by events like the situation in Ukraine, the Middle East, and U.S. tariffs.

Japan's prime minister has secured cabinet approval for next year's record $785 billion budget. The government is hoping that a limit on new bonds will reassure investors that it won't blow out the debt. The plan includes nearly $58 billion in defense spending. It still needs Parliament's approval before taking affect in April.

And the lucky lottery player in a suburb of Little Rock, Arkansas has won the second-largest Powerball jackpot ever, but it could be a while before we know who won the $1.8 billion prize. That's because Arkansas -- well, Arkansas allows its winners to remain anonymous for up to three years. If the winner takes the lump sum payment, that would shake out to about $835 million before taxes.

It was a whirlwind year for economic news. President Trump put pressure on the Federal Reserve to drop interest rates, there were concerns of a possible AI bubble, and an affordability crisis that continue to plague Americans. All of this as President Trump shook up global trade.

Anna Cooban takes a look now at the biggest moments of 2025.

(BEGIN VIDEOTAPE) ANNA COOBAN, CNN BUSINESS AND ECONOMICS REPORTER: Twenty twenty-five was a pretty eventful year in global trade. When President Trump took office again in January, countries braced themselves for new tariffs. But when Trump's so called "Liberation Day" came in April --

[05:35:00]

DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: We came armed with a little smaller chart.

COOBAN: -- the hit was even harder than anticipated. Tariff rates were higher than expected or countries were hit with duties of at least 10 percent with some, like Brazil, hit with tariffs much, much higher.

TRUMP: They charge us, we charge them. We charge them less, so how can anybody be upset?

COOBAN: Tax experts say the high tariffs tend to lead to higher prices for consumers. And markets reacted to Trump's new GTs, but when the bond market began to sell off the president then seemed to listen.

TRUMP: Well, I thought that people were jumping a little bit out of line. They were getting yippy, you know? They were getting a little bit yippy -- a little bit afraid. I did a 90-day pause for the people that didn't retaliate because I told them if you retaliate, we're going to double it. And that's what I did with China because they did retaliate. So we'll see how it all works out.

COOBAN: But the U.S. and China each raising tariffs on the other and then eventually lowering them. The markets rebounded.

And a new term "TACO" was coined. That stands for "Trump Always Chickens Out."

TRUMP: You call that chickening out? Six months ago this country was stone-cold dead. We had a dead country. We had a country -- people didn't think it was going to survive, and you ask a nasty question like that. Uh, it's called negotiation.

COOBAN: And over those 90 days negotiations continued. The UK agreed to the first trade deal, at least in principle -- and more deals, though with limited details, were announced over Truth Social. That's Trump's social media platform.

By August, those without a deal got a new tariff rate.

TRUMP: I love tariffs. The most beautiful word. But I'm not allowed to say that anymore. I said tariff is my favorite word. I love the word tariff.

COOBAN: Then in October, Trump and Chinese leader Xi Jinping met and began to soften their respective positions on tariffs. Further meetings next year will be key.

But in any case, Trump's tariffs bypassed U.S. Congress and in 2026 Trump awaits a decision from the Supreme Court on whether some of those tariffs are even lawful.

So 2025 may have been eventful but there is clearly plenty to watch out for in 2026.

Anna Cooban, CNN, London.

(END VIDEOTAPE)

SOLOMON: And joining us this morning from London is Tom Standage, a deputy editor of The Economist and editor of The World Ahead. Great to have you this morning, Tom.

Twenty twenty-five -- it was the first year of President Trump's second term. How would you describe this last year in terms of the U.S. economy?

TOM STANDAGE, DEPUTY EDITOR, THE ECONOMIST, EDITOR, THE WORLD AHEAD: Well, it's been a bit of a rollercoaster, hasn't it? So we had, as we just heard, that wobble after "Liberation Day" and then we had Trump basically changing his position on the tariffs quite a lot.

Then more recently we've had the problem that the government shutdown means that we don't really show how to read the latest figures. So the inflation figures that we just got were actually better than expected. Inflation does seem to have fallen. We don't know how much of that is due to sales around Black Friday because lots of retailers cut their prices. Lots of prices go down around Black Friday so we don't know how to read that.

We also had surprisingly good GDP numbers. So I think it's still very much a feeling that we're kind of navigating in the dark.

A lot of economists are expecting things to get worse in 2026. That the impact of the tariffs will feed through. But so far, the impact has been really quite muted.

SOLOMON: Yeah.

STANDAGE: So I think that's the big question as we go into the new year.

SOLOMON: Yeah. I mean, to your point, the results of some of these policies have been a bit unexpected. I mean, tariffs didn't cause the level of inflation that many had warned about.

On the other hand, Tom, do you think some of these policies stand to make countries like China more influential when it comes to trade?

STANDAGE: Oh, absolutely, because China is now presenting itself as the adult in the room. Donald Trump has torn up a load of trade deals and essentially, if you have a trade deal with America it may not be worth the paper it's written on anymore.

And if you have one of these new deals -- Britain has one and the EU has one, and so on -- as we just heard, they have been announced on Truth Social. They haven't actually been ratified by -- I mean, normally, it takes years to do a trade deal. So the legislatures in these countries -- it's -- none of this is actually pinned down in black and white.

And, in fact, we are apparently now in the process of arguing -- the British government -- with America about the detail of that deal that was done earlier this year. So there's still a huge amount of uncertainty around all of this.

And then, of course, if the Supreme Court strikes down some of these tariffs, we're going to have another round of tariff chaos because Donald Trump will then probably try to reimpose the tariffs but just using a different set of rules and a different set of powers rather than the Emergency Powers Act.

So we could be in for a very bumpy road with tariff rates going up and down in 2026 as well.

SOLOMON: So essentially, the rollercoaster could apparently continue into 2026.

Looking into 2026, Tom, what are you expecting to be the big themes? I mean, you think about the last year. You think about all of the M&A activity. You think about the inflation pictures. You think about the weakening job market. What are you looking at as sort of some of the big themes moving into next year?

STANDAGE: Yeah, there -- those are all good ones.

I think there's a general sense that there's a lot of uncertainty around and we should start to get some clarity on some things.

[05:40:00]

So what's really going on in the jobs market? How much impact are the tariffs going to have? How much pulling forward of sales has there been. How much have importers been eating the tariffs, and will things get worse? We'll find out about that, too.

We'll also find out what's going to happen with the politicization of the Fed. So there's a lot of concern that, you know, whoever Donald Trump appoints to run the Fed may just say right time to cut interest rates. And that could cause problems because the bond markets might --

SOLOMON: Um-hum.

STANDAGE: -- not go along with that.

And then there's the big question of what happens in markets and is the AI bubble really a bubble. Will prices fall? What's going on in private credit markets? An awful lot of the AI investment now is being funded with these quite opaque vehicles. And also, an awful lot of the shares that -- the AI companies are investing in each other and the share price movements that we've seen have been because one of them announces a deal with another.

SOLOMON: Hmm. STANDAGE: And there's a sort of weird circular nature to the fund here.

So it only needs one of these companies to say actually it's going to slow down slightly, or it has missed a target, or something like that --

SOLOMON: Um-hum.

STANDAGE: -- and the whole house of cards could come down.

So I think there's an awful lot of sources of potential uncertainty in 2026, but I think we should get some clarity on at least some of them.

SOLOMON: Yeah. And to that point -- I mean, you outline quite a few of them there. I mean, what seems to be the biggest concern in 2026? You mentioned the Fed there, and that's the one that gets a lot of attention I think because Jerome Powell is obviously so public-facing. But then you have concerns about the bond market and debt.

I mean, what seems to be, from your perspective, the biggest risk in 2026?

STANDAGE: I think the biggest risk is that there are so many plausible sources of risk here. I think that's the big problem.

So talk of a bond market crisis in America, which would once have been ridiculous. Treasury bonds are, you know, the safest investment. The fact that people are even talking about that is very worrying.

Obviously, the weird thing about the AI bubble is that everyone is talking about it being a bubble. So we're in a kind of bubble-bubble.

We're also in a recession-recession because there hasn't been a recession for a very long time. And, in fact, recession seemed to be occurring less frequently.

SOLOMON: Um-hum.

STANDAGE: So we're kind of overdue one.

Then, as I say, an awful lot of the stuff that's happening in the private credit markets, particularly around the funding of AI infrastructure, very much reminds me of what happened in the global financial crisis where, you know -- when people started defaulting their mortgages there was this big uncertainty about who was exactly going to -- going to end up having to pay for it and how exposed everybody was.

And then, of course, the AI stocks also remind me of the dot.com bubble because everyone got very enthusiastic. And, in fact, if you look at the fraction of U.S. household wealth that is in the stock market now, today it is higher than it was at the peak of the dot.com boom.

So all of these are very, very plausible sources for some sort of fiscal or market problem, and that's really quite worrying that there are so many possible things that could go wrong.

SOLOMON: Yeah. On the one hand it's a positive that you think so many more Americans are invested in the market. But to your point, if there is a major correction, if there is a major decline in prices, many more people will be impacted, and we'll have to see the results of that.

Tom Stamage, appreciate -- Standage, appreciate you being with us this morning from London. Thank you.

All right. Still ahead, more revelations from the Justice Department. Straight ahead, the agency finds new documents potentially related to the Epstein case. And outrage grows over the slow release of the files.

We'll be right back.

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[05:47:50]

SOLOMON: Welcome back. I'm Rahel Solomon. And here are some of the stories we are watching for you this morning.

The U.S. has launched a military strike against Islamic State targets in Nigeria. Video from the Pentagon shows a Tomahawk missile launched from a U.S. destroyer. President Trump says that he warned terrorists in Nigeria to stop slaughtering Christians or there would be hell to pay.

Millions of people are at risk for new flooding from storms throughout California in the coming hours. Heavy rain and high winds slammed parts of the state, creating flash flooding, mudslides, rockslides, and debris flows on Christmas Day. Tens of thousands of customers are without power. That's according to poweroutage.com.

Twelve European countries, along with Canada and Japan, are condemning the Israeli government for approving 19 new settlements in the occupied West Bank. The countries say that the move harms the prospects for long-term peace and security in the region. The approval comes as Israeli settler violence towards Palestinians have surged in the West Bank in recent months.

President Donald Trump posted a Christmas message on social media decrying the Jeffrey Epstein controversy. The president called it a "radical left witch hunt." He accused Democrats of giving Epstein money and attending his parties, saying they have "a lot of explaining to do." He added that he dropped Epstein before it was "fashionable" to do so.

The Justice Department says it has lawyers working around the clock to go through more than a million additional documents potentially related to the case.

CNN's Marshall Cohen has the latest now.

(BEGIN VIDEOTAPE)

MARSHALL COHEN, CNN SENIOR REPORTER: Reaction is pouring in after the Justice Department's bombshell announcement that there might be as many as one million additional documents about Jeffrey Epstein that still need to be released.

Remember, Congress acted in November to pass a law with massive bipartisan majorities requiring the Justice Department to release all files related to the convicted sex offender Jeffrey Epstein and the Epstein investigation. The deadline for those disclosures was last Friday. The Justice Department has already released hundreds of thousands of documents, but they announced on Christmas Eve that there might be one million more.

[05:50:00]

Lawmakers from both parties, Democrats and Republicans, are outraged. I want to break down for you some of the reaction.

Thomas Massie, Republican from Kentucky, one of the lawmakers who has really challenged President Trump from his own party and led the fight to get these documents released. He said, "Today the DOJ claims the Epstein-Maxwell file exceeds 1.7 million documents. And they still expect you to believe this involves only two guilty people." Referring there to Epstein and his associate Ghislane Maxwell who was convicted of sex trafficking in 2021.

Reaction from the Democratic side of the aisle. Representative Ro Khanna, Democrat from California, said, "Thomas Massie and I will continue to keep the pressure on. After we said we are bringing contempt, the DOJ is now finding millions more documents to release."

There he's referring to the effort by him and Congressman Massie to potentially hold senior officials from the DOJ in contempt and possibly levy fines as a punishment for their non-responsiveness with regards to the new transparency law.

And then Chuck Schumer, the top Democrat in the Senate, said, "A Christmas Eve news dump of 'a million more files' only proves what we already know. Trump is engaged in a massive coverup. The question," Schumer said, "Americans deserve answered is simple: WHAT are they hiding and WHY?"

Now look, the Justice Department says they're not hiding anything. They have pointed to the fact that they have released hundreds of thousands of files already and that they have brought in career prosecutors, civil servants, officials from across the DOJ to go through these files and make the redactions. They're working weekends. They're working over the Christmas holiday. They're working overnight to get this done.

DOJ says they're trying to get it done as fast as possible, but you may need to have some patience. The Justice Department said yesterday that it might take a few more weeks to get this potentially million- document dump posted to the public website.

Marshall Cohen, CNN, Washington.

(END VIDEOTAPE)

SOLOMON: All right. Still to come for us, Mexico's new way to resolve the question of who get the dog when couples break up.

We'll be right back.

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[05:57:00]

SOLOMON: Welcome back.

When relationships end, some couples fight about the custody of the children. But what about custody of the pets? Now lawmakers in Mexico have passed a law to resolve the question of who gets the dog.

CNN's Valeria Leon has more now from Mexico City.

(BEGIN VIDEOTAPE)

VALERIA LEON, CNN CORRESPONDENT (voiceover): In Mexico City, pets are no longer considered mere property in the case of a breakup. A new reform to the civil code now treats dogs and cats as family members, allowing judges to grant custody when couples separate.

For Leslie and David that change reflects a decision they made on their own. Even six months after they split, they're still connected not by legal paperwork but by the three dogs they adopted during their five-year relationship.

LESLIE: (Speaking foreign language).

LEON (voiceover): Leslie says it wasn't based on convenience but in the emotional bond each dog had with its caregiver.

DAVID: (Speaking foreign language).

LEON (voiceover): David agreed. "Any decision," he says, "had to cost the least amount of emotional stress possible for their dogs."

And that approach prioritizing the animals' well-being is exactly what lawmakers say that was missing in many breakups.

UNIDENTIFIED FEMALE: (Speaking foreign language).

LEON (voiceover): Ledesma (PH) says that behavior is far more common than cases like Leslie and David's.

In many separations dogs and cats become bargaining tools used as leverage or to cause emotional damage. That pattern is what prompted Congress to act.

UNIDENTIFIED MALE: (Speaking foreign language). LEON (voiceover): Lawmakers approved the reform known as "Who Gets the Dog," which formally recognizes animals in divorce cases. Under the law, judges can grant full or shared custody. And just like in child custody cases, failure to comply with the judge's decision can carry legal consequences.

And while the law is meant to resolve disagreements, for Leslie and David it confirms something they already knew -- that sometimes love means letting go and putting the dogs first.

Valeria Leon, CNN, Mexico City.

(END VIDEOTAPE)

SOLOMON: Our quick sports hit. The NBA had five marquis games on Christmas Day.

In Denver, Nikola Jokic led the Nuggets to a thrilling overtime victory against the Minnesota Timberwolves. He scored 56 points. And for the 179th time in his career, racked up a triple-double. Jokic needs just two more to move into second place all-time in the NBA. He also set a league record with 18 points in overtime.

[06:00:00]

Now to the NFL where the Denver Broncos are a step closer to clinching the top playoff spot in the AFC. They beat the Kansas City Chiefs 20- 13 in the Thursday night matchup. The Chiefs were without quarterback Patrick Mahomes who is out after a season-ending knee surgery.

Now the game may be the last at Arrowhead Stadium for Chiefs tight end Travis Kelce. There is widespread circulation that he may announce his retirement at the end of this season.

All right. That'll do it for us here this week. Thanks for joining us here on EARLY START. I'm Rahel Solomon in New York. Have a wonderful weekend. "CNN THIS MORNING" starts right now.