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Stocks Sink after Trump Imposes New Tariffs; Stock Market Sees Big Losses after Trump Tariffs; Trump Adviser: President Plans to "Lean In" on Tariffs in Speech; U.S. Slaps 25 Percent Tariffs on Mexico & Canada, 20 Percent on China; One-on-One with Senate Majority Leader John Thune. Aired 12-12:30p ET

Aired March 04, 2025 - 12:00   ET

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

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DANA BASH, CNN HOST, INSIDE POLITICS: Today on "Inside Politics", Trump's big night. After 43 turbulent days, President Trump will address Congress for the first time in his second term, and he's bringing Elon Musk with him. He will take credit for his promises kept. But what will he do about the chaos? Some Trump voters even say they didn't sign up for.

Plus, higher tariffs, they're likely to mean higher prices from everything, the cars you drive to the vegetables you eat and the shoes you wear. But how big is the economic and political risk the president is taking. And Senate Majority Leader John Thune will be right here at the "Inside Politics" table.

It's his first presidential address as Senate Republican Leader trying to implement President Trump's legislative agenda. But what about those new tariffs and Elon Musk's cuts? And is President Trump's America still committed to standing up for other democracies? I'm Dana Bash. Let's go behind the headlines and "Inside Politics".

And we begin with breaking news. The markets, they are taking a nosedive right now in response to those newly imposed tariffs from President Trump on both goods from China, Mexico and Canada, if you look at that, it is down almost 700 points. I want to go straight to CNN's Vanessa Yurkevich, Vanessa?

VENESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Yeah, what you are seeing now in the markets is mostly a response to this trade war. This trade war has erased all gains in the markets since President Trump was elected. And what you are seeing is investors very nervous about what this trade war means for prices? How consumers will react, and then ultimately, what kind of a business outlook are we seeing because of this trade war?

We heard from Target CEO Brian Cornell this morning, who said that they are going to have to raise prices on things like fruits and vegetables that we get from Canada and Mexico, and consumers will feel that impact in the next couple days. We are also hearing the same thing from companies like Best Buy having to raise prices, and Walmart, just the other week, said that they expect consumer growth to slow.

And for the average consumer just taking a step back here outside of Wall Street on Main Street, we know that consumer confidence has fallen. We know that inflation is heating up, and tariffs are certainly adding another element of uncertainty for the average American.

One estimate, Dana suggests that Americans could pay up to $1,200 more a year because of these tariffs. So, you see there, the DOW down 650 points about other markets falling as well, and consumers really bracing for what this impact could mean for prices and their bank accounts, Dana.

BASH: Vanessa, thank you so much. What a statement that the gains that the economy has seen since President Trump took office at this point are erased because of his of his tariffs. Obviously, they go up and down. We're going to keep watching them. Thanks, Vanessa.

I want to bring in some really insightful reporters today at the table on this very important day in the United States Congress. CNN's Jeff Zeleny, Ayesha Rascoe of NPR. CNN's Kayla Tausche and CNN's Stephen Collinson, hello, everybody.

I just want to pick up where Vanessa just left off. I mean, there are so many data points that really do hit home the impact of these tariffs. $1,200 a year, for example, is one estimate that is going to be the increase in prices for the average consumer. This is what Donald Trump ran on, on making the crisis of affordability better. So far, it ain't happening.

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Without question. And even if this was -- this is not happening in a vacuum. I mean, even if it was just this, it would be significant for prices, but it's not. I mean, high prices on goods are already one of the central challenges of the administration that was yesterday.

Never mind today, not just eggs and other things, but there is a sense of consumer confidence has been shaky, and this is only adding to that fact. The president talks a lot, and I expect we'll hear him tonight talking again about all the battleground states he won. He talks about Wisconsin. He talks about Michigan. He talks about Pennsylvania, in all of those states and more they are going to feel this most acutely.

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Senator Ron Johnson, a Republican Senator as conservative on the scale as they come. He said, I'm from a state that will feel this pain on the agriculture side and the manufacturing side. And the reason is, the markets are -- the free markets of Mexico and the United States and Canada on autos, just on autos, the suppliers and the parts that flows freely up until now, that is no longer the case.

So, when the president yesterday -- Roosevelt said this is good for auto companies. The Ford Motor Company CEO said this will blow a hole in our business. So, it simply is shocking in some respects, that the president is doing this, even though he's long believed in tariffs - BASH: Yeah.

ZELENY: -- particularly as high prices are already his biggest challenge.

BASH: Well, that's the thing is that the idea that Donald Trump is supporting tariffs and is implementing tariffs in a vacuum, as you would say, is the least surprising thing that we've maybe seen this entire 43 days. But at this time, perhaps. I want you covered tariffs for a long time before I bring you in, I want you to listen to what the Trump perspective is on this from Jason Miller. He was on with Audie Cornish this morning.

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AUDIE CORNISH, CNN HOST: Do you get the sense, though, that the tariffs will have to be discussed, meaning that he'll have to say to the American people, there could be some pain ahead.

JASON MILLER, SPECIAL ADVISER TO PRESIDENT TRUMP: Well, actually, I would say that he's going to lean into it. He's going to talk about how increasing tariffs can actually go close the trade deficits. Which January, we saw record trade deficit, particularly when it comes to countries such as Canada, Mexico, China. And how, if we don't go and do this now, we're going to be completely wiped out by certain industries?

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BASH: So, is this one of those classic examples potentially, of short- term pain, long term gain?

KAYLA TAUSCHE, CNN SENIOR CORRESPONDENT: Well, there's really data that supports any thesis. I mean, Jason Miller is there talking about trade deficits. But there are other economists who would say, well, if the U.S. is importing more than it exports, that means that our consumers here are wealthier and can afford to buy more things than other countries can, and maybe that's a good thing too.

When I talk to people in the business community, even though many of them have defended tariffs, they don't want to get on Trump's bad side publicly. Privately, I can find no one who is defending this and who does not believe that there will be more than short term pain here.

And the hope is that while there hasn't really been anyone who's willing to say this to Donald Trump privately to say, hey, I don't think that this is going to achieve what you intend it to achieve? They believe that perhaps the data will bear that out, that the data will supersede all of the anecdotes that we've heard from voters on the ground or politicians who represent some of these districts.

That when you see first quarter GDP in negative territory, that when you start to see the April and May jobs numbers that fully reflect the change in size to the federal workforce. And when you've already started to see a little bit in some of the manufacturing data, where manufacturers say we're not hiring, we're not investing, because things are so uncertain, and they said tariffs were that primary reason.

BASH: And let's just remember that all of those numbers that explain to the economy in theory did not have a direct bearing in the 2024 election on how people felt, which was totally understandable. And the question is, how is that going to play out now, when there's a different guy in the White House?

AYESHA RASCOE, NPR HOST, "WEEKEND EDITION SUNDAY" AND "UP FIRST": Well, people still feel bad about the economy and that should be the biggest concern for the White House, is that people feel bad about the economy, and then when you look at polls, they don't believe that the economy is getting better. And that's with Trump in office.

And the thing about it, I covered every day of the first Trump White House, and before COVID, the biggest thing he had in his corner was the economy was great. It was booming, whatever you thought of the other chaos. The idea was that Trump was great for the economy.

BASH: And a lot of people voted for him because he wants it -

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RASCOE: He wanted that back.

BASH: Right.

RASCOE: He is not delivering that, and people aren't feeling that. And so that is going to be a huge issue. And I've never heard Americans say they want to pay -- they want to do some short-term pain. I have never heard -- I don't haven't met those Americans. They would say we can't afford anymore, right?

BASH: And we are only 43 days in. Give us the big picture here, Stephen Collinson.

STEPHEN COLLINSON, CNN SENIOR REPORTER: I think this is the biggest gamble of the president second term so far. He's not just putting his own financial -- political standing on the line. He's putting the financial standing of every American, because there's no way you can put 25 percent tariffs on many goods, and it doesn't get reflected by the consumer.

And what is happening here is the president, I think rightfully, he's trying to address this question the downside of globalization that it hollowed out manufacturing in lots of those Rust Belt swing states. The problem is that is a process of decades. The president has three years and ten months to fix this. A company is going to come back from China and Indonesia hugely expensive venture during that time, or are they going to wait it out?

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So, it's a huge gamble, and the president is not just trying to reinvent the international system we've all been living under for 80 years. He's now trying to change the entire trading system of the world. That's why the markets are reacting like this. BASH: OK, everybody stand-by, because coming up, Senate Majority

Leader John Thune, Republican of South Dakota, will be my guest. Stay with us.

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BASH: President Trump addresses Congress tonight; he'll do it after a series of controversial decisions only in the last 24 hours. He started a trade war overnight, levying steep tariffs on America's top trading partners and closest allies. He halted military aid to Ukraine after the Oval Office meeting with President Zelenskyy on Friday ended with President Trump and Vice President Vance berating the Ukrainian Leader.

So how will he explain all of this in his speech tonight? Joining me now is Senate Majority Leader John Thune, who is no stranger to these speeches, but this will be the first time he will attend as the Republican Leader. Thank you so much for being here. It's great to see you again in person.

SEN. JOHN THUNE (R-SD): Thanks Dana.

BASH: I do want to start with Ukraine. The president hasn't always sort of stuck to the facts and the history, but you have consistently that Russia was the aggressor that started this war. What do you think the president's announcement that it is they're going to withhold, that the U.S. will withhold military aid to Ukraine will do does it not just help Russia?

THUNE: Well, I mean, I think at this point it's a pause, it's not a stop, and I think it's designed to get the players to the table. It's unfortunate the way things went down last week, but I think they have a chance here. There's a deal out there. And I think what everybody wants to see at the end of the day is a peaceful resolution there.

And I think President Zelenskyy, through some of his communications today, is suggesting that he's ready to do this -

BASH: So, this is a strategy?

THUNE: I think it's part of the broader you know -- the president and his team have tried to change the conversation around this, and I'm hoping that it will lead to a successful outcome. In the end, that's what we want to achieve.

BASH: Last week, the U.S. joined with Russia, North Korea and Belarus to vote against a UN resolution which condemned Russia's invasion of Ukraine. If you combine that with the eruption in the Oval Office last week, I've had a lot of people ask me, and I've seen a lot of writing around this fundamental question. And I want to know what you think about this, is it still the U.S. policy to stand up for democracies around the world?

THUNE: Well, I think it's always America's policy to support in democracies. Now, what that level of support entails, is an open question. And I think what the -- you know President Trump has tried to achieve, at least with respect to Ukraine, is to get the European nations more engaged in terms of providing the security there.

The United States obviously has invested heavily in that region. But my view is, it's a -- this is a -- you know whether we like it or not, it's a dangerous world, and you do have bad actors out there. You got the Russians and the Chinese the North Koreans and the Iranians all working together in an unholy alliance.

And I think the U.S. is -- people look at the U.S. as the leader when it comes to freedom and democracy, and we want to support that. And I think we have very extensively invested heavily in Ukraine. I don't think there's probably the political support for continued financial investment there, but if the European nations can step up and with American support in terms of training and intelligence sharing and all the things that we can provide and offer, we still have to be the deterrent to bad behavior. And other countries looked us for that leadership role.

BASH: And you're confident that that is still going to be the U.S. role going forward in the next four years.

THUNE: Well, that's my view. I mean, obviously every administration has a different view when they come into office. But I think that you -- there's just -- there's no alternative. I think the alternative, frankly -

BASH: Will be alternative is America First.

THUNE: Well, the alternative, I think, you know, you don't want America to become isolationist. Now again, what form America's involvement support takes is a matter of debate. And -- you know we can talk about whether soft power, hard power. What components that ultimately entails, but I think in the end, people look to us to be a leader, and we have to provide that leadership.

BASH: Tariffs.

THUNE: Yes.

BASH: The president did announce these new tariffs, 25 percent on all goods imported from Canada and Mexico. It will really, I don't need to tell you, it's going to really impact not just states across the country, but especially your State of South Dakota. In 2023, 40 percent of your state's imported goods came from Canada. 44 percent of South Dakota exports went to Canada. So, what's your message to your constituents who could quite literally pay a heavy price?

THUNE: Well, these are they are two largest trading partners. There's no way around that. And that's, frankly, what the USMCA was all about U.S. and Mexico, Canada Free Trade Agreement was to create a -- you know basically a North America free trade zone. And I'm very supportive of that.

I think what the president's trying to achieve here, in my view, at least, is a result and an outcome that addresses a concern that the American people have had about open borders, both northern and southern and the -- you know, the fentanyl traffic that's coming into this country and what it's doing to American citizens.

We have literally 100,000 deaths a year, almost, if you look at almost twice the number of deaths in this country related to fentanyl, as we saw in the entire Vietnam War. And so -- I think the president is looking at this as a means to an end. I don't think it's the end itself.

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I certainly hope it isn't. And I hope, more importantly, though, that this administration, unlike the past one, will look at opening up more trade deals. There are conversations around a deal with the U.K. that was something I've been advocating for a long time.

We did have a single Free Trade Agreement signed in the entire four years of the Biden Administration. And I think, I believe this administration is going to be a lot more aggressive in trying to open markets the tariff policy again, I have a different see that through a different lens -

BASH: Oh -

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THUNE: That's why -

BASH: -- going to ask you, I mean, the stock market is already going down, so that's Wall Street's answer to it hasn't even hit Main Street yet, which I know matters most to people like you -

THUNE: Right.

BASH: -- who represent average Americans. Do you think this is good policy?

THUNE: Well, I don't -- you know again, it's a -- I think this is a president who has used that authority in ways that have gotten outcomes and results, and it's already been stayed once it's going into effect. We understand now, and the markets are reacting to that. I think the markets, in time, will stabilize a little bit around this one that becomes clearer with the -

BASH: What about people's pocket books? I mean, prices are already sky high.

THUNE: Yeah. And I think that's -- that's an issue, in my view. I mean, I think you have to think about the economic impacts through inflation. I think you have to look at growth in the economy and how that's impacted by all this. Those are -- those are real issues and so the administration is going to have to take, in my view, as they -- as they evaluate, some of these policy decisions, the macro-economic impacts of these. And none of these things happen in a vacuum, obviously. But I do think the president has been very specific. He is somebody who believes that in peace through strength, and is trying to serve American strength on the global stage and more immediately in our relationships with our northern and southern neighbors, who, frankly, again, have let the -- their borders get completely out of control, which has led to the not only the fentanyl deaths, but all kinds of other bad social and economic problems in this country.

BASH: I want to ask about Elon Musk. Our understanding is that he is going to be at the speech tonight. The president plans to highlight him and his work. No one argues that there isn't waste, fraud and abuse, probably more extensive than anybody knows in the government, but you have seen these cuts.

They have been pretty chaotic. On a whole host of issues; they've had -- they fired people, and they realized that they were the wrong people. And in areas that aren't just about soft power, but are also about like the national security of America, are you comfortable with how he is going about business he being Elon Musk?

THUNE: Well, I think that he's kind of going about business as he would in a private business. And obviously there are nuances in dealing with the federal government that are probably different than what he's accustomed to in the private world.

But I do think he's bringing you know, a view of this that a lot of people around this country welcome, and that is -- you know, most of, at least the people in our supporters. A lot of our supporters across the country believe in a limited but effective federal government, not a bloated bureaucracy.

And I think what the he is trying to achieve is to try and figure out ways that we can make government cost less, run more efficiently, modernize it with technology. And I think those are the objectives are right? How they go about it matters, as you point out?

BASH: And are they going about it?

THUNE: Well, I mean, frankly, what I would do, I think he's the DOGE is going about this and doing the big scrub, but now that you've got this is why we work so hard to get cabinet people in place. Is handed off to these leaders, these managers, who are going to be making decisions, and they're going to be, I think, probably better attuned --

BASH: Do you feel that -

THUNE: -- individual -

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BASH: -- is he going to do that? Have you met with him? And do you intend to meet with him to make that suggestion?

THUNE: Well, I have met with him. I have met with him recently, but I expect to hear in the near future. And I think that's a conversation that we'll have. And I think that, you know, obviously, as I said, the overall goals and objectives are the right ones. And I think he brings an eye to this that probably -- you know we -- you couldn't have gotten just by having, sort of the Congress or somebody else do it.

I think having somebody who has created jobs, changed and transformed businesses in the real world is a useful perspective and a scrub of our federal government that we haven't seen in a long time, and frankly, was overdue. So, I am hopeful it yields the right result. But there are, anytime you do this, it's -- you know you also have to pay attention to the aftermath of that and how it impacts people. I mean, these are real people. They need to be treated that way.

BASH: This is the first time I've interviewed you since you've become the Senate Majority Leader. Mitch McConnell was Leader for 17 years, I think, the longest in history.

THUNE: Right?

BASH: How is your approach different? And how have we seen that even so far?

THUNE: Well, I mean -- you know obviously Senator McConnell left big shoes to fill. He had a 10 year there, the longest ever for any leader in the Senate. And style and a way of doing things, I have a different style. Different way of doing things.

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What we try to do, Dana is, I'm very consensus-based collaborative, try and unleash the potential and the talent that we have in our -- in our Congress -- in our Senate, Republican Senators. And in take advantage of the process where we get back to more of a regular order where the committees are functioning and working, where individual Senators have opportunities to get votes on bills, both at the committee level and on the floor, and to get some order and discipline brought back.

The last four years under the Democrats, it was just kind of, in my view, chaotic. And I'm somebody who sees the world in a way that the United States Senate, although its rules make it very different and unusual relative to any other body like it in the world. You still have to have -- you know you've got to be respectful of people's time, maximize their ability to -- you know give voice to and represent the people in their individual states.

And we're trying to empower individual Senators in that way. And I hope that in the end, it's successful. We have some hard things to do. And in the Senate, as you know, it takes 60 votes to do almost anything consequential, which means you've got to have some bipartisanship. And I hope we can see some of that. We live in a very polarized time. And you know, the -- in the -- just in the time I've been in politics that's changed a lot, trying to get people to come to the middle, to find common ground is extraordinarily hard.

BASH: Mr. Leader, thank you so much for being here. I really appreciate your time.

THUNE: Thanks, Dana, Nice to be with you.

BASH: -- later -

THUNE: Yeah, it sounds good.

BASH: Coming up, President Zelenskyy just sent a message to the White House. The question is, will it be enough to repair his relationship with President Trump? We will explain to you what he said after a quick break.

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