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China, EU Retaliate Against U.S. for New Tariffs; New Trump Tariffs on Nearly Every Country Take Effect; JPMorgan CEO: Recession a "Likely Outcome" of Trade War; Trump Pressures GOP Headlines to get on Board with Senate Bill; Texas AG Ken Paxton Challenges Senator John Cornyn for Seat. Aired 12-12:30p ET

Aired April 09, 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", economic shock waves, the world is striking back against President Trump's new sweeping tariffs in effect today, leaving the American consumer in the cross hairs of his spiralling trade war. Plus, everything is bigger in Texas, including its Senate primaries. MAGA Star Ken Paxton is officially challenging fellow Republican, John Cornyn for his lone star seat in what's expected to be the most heated and expensive GOP primary in the country.

And does the White House have a Barstool problem? Barstool Sports Founder Dave Portnoy, a Trump supporter with an enormous, MAGA phone in the so called manosphere, says he's lost a fortune in the market so far and is souring on the president's trade war. How do his millions of young men who follow him feel he'll join us live? I'm Dana Bash. Let's go behind the headlines and "Inside Politics".

President Trump's global trade war is entering a new and dangerous phase. Overnight, new U.S. tariffs on nearly every country in the world went into effect, including a whopping 104 percent tax on goods from China. This morning, the European Union and China both launched counter attacks on American made goods.

One billionaire investor is describing this moment as a once in a lifetime breakdown of global order. But here's how President Trump is responding. Quote, be cool. Everything is going to work out well. The USA will be bigger and better than ever before. CNN's Matt Egan is in New York. Matt, the president is saying, be cool. Is that the vibe you're getting from Wall Street?

MATT EGAN, CNN REPORTER: Well Dana, I think the stock market has been cooler than I would have anticipated, given everything that has just happened in the last 24 hours. I stress at this moment, though, because things can change rapidly. Markets have just been so volatile in recent days, you almost can't look away, because you might miss a 1 percent move in either direction.

But you see, the DOW is down 165 points, a half a percent. The NASDAQ is actually up a little bit on the day. Now, even though things might look somewhat calm when you're just looking at the DOW, beneath the surface, there is a lot of concern and fear. The Wall Street fear gage, the VIX Volatility Index, it remains at very high levels, that we've rarely seen outside of the COVID crash in the 2008 financial crisis.

And I've got to tell you, anecdotally, talking to investors and analysts and economists, I don't think I've ever heard them as concerned and confused and just sort of frustrated, right? They don't understand what the end game is with this trade war, and they're frustrated because a lot of this feels self-inflicted.

I talked to Veteran Tech Analyst, Dan Ives, and he's very concerned about the trade war and what it's doing to the tech sector, because they rely on Asia in their supply chain. And he said, listen, when it comes to tariffs, they are playing with fire. Now it's just stocks, but this category five storm is coming for the U.S. consumer.

One place that is not being cool right now is the bond market. Normally, when the stocks go way down, you expect people to flood into ultra safe government bonds. But that is not happening. In recent days, we've seen stocks and bonds fall simultaneously, that's raising a lot of eyebrows on Wall Street, and it's also making it more expensive for consumers, businesses and the federal government to barrowing, Dana.

BASH: Yeah, Main Street versus Wall Street is something that we're hearing a lot about, coming from the White House. We'll talk about that. Thank you so much, Matt. Appreciate it. By now, President Trump imposed so many tariffs, it's hard to keep it all straight. So, let's give you a bit of a recap.

Today, 57 of the United States trading partners were hit with a broad- based double-digit tariff. Now everywhere from the European Union with 20 percent and Cambodia with 49 percent that is after the president imposed a 10 percent universal tariff on pretty much all goods coming from nearly every country.

Plus, last week, a 25 percent tariff on all foreign made automobiles went into effect. Don't forget, there's been a 25 percent tariff on goods from Mexico and Canada that went into effect last month.

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And of course, China, which has been hit the hardest with tariffs starting early in February. Just let all that sink in. I am joined by a terrific group of reporters today. CNN's David Chalian, Nia-Malika Henderson of "Bloomberg" and CNN, CNN's Jeff Zeleny, Hello everybody. David, give us your big David thought.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: No, obviously the president is in a waiting game at the moment, because while everyone is predicting that his policy here is terrible for the economy, and fear is gripping some of his own corners of support, whether it's in board rooms of corporate America, some folks on Wall Street, some Republicans on the Hill. You hear concern from his own house of support, and yet he seems to be

given a little bit of time here to accomplish the overall goal, which is why Republicans may get on board with their budget vote today, Dana, which is why we may see Donald Trump continue to fight through this. What is going to happen, though, and this is the big political peril

for him.

In the next few weeks this is going to start to sink in and be absorbed at the personal kitchen table level, and that is when Donald Trump may hit a kind of political turbulence that he hasn't actually experienced yet as president, in terms of losing crucial support from Americans.

I don't -- I'm not predicting that will happen, but I'm saying that's the question that hangs over this, and I think we are a few weeks away from seeing it fully course through that personal economy.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL ANALYST: Yeah. Listen, I think obviously people are checking the stock market. 50 percent or so of Americans have their retirement accounts wrapped up in the stock market, so they are seeing some of the effects.

I think what is unclear still with this president's policy, what are they waiting for, right? Are they waiting for an influx of manufacturing jobs to come back, or are they waiting for this sort of negotiation period where they can -- yeah, where they can figure out different levels of tariffs for different countries?

BASH: And that's really the key question --

HENDERSON: Yeah.

BASH: -- Nia, and it's one that the president himself tried to answer when he went and spoke to House Republicans at a fund raiser last night.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: I know what the hell I'm doing. I know what I'm doing. These countries are calling us up, kissing my ass. They are. They are dying to make a deal. Please, please, sir, make a deal. I'll do anything. I'll do anything, sir.

(END VIDEO CLIP)

BASH: Jeff, I've heard so many sorts of analogies made for this kind of situation that we're in one of them, and I don't remember who said it. If you're out there, forgive me, I would give you credit. Is that it's like a plumber ripping out all the pipes and saying, oh my gosh, all these people are calling me because they need a plumber, and I'm so excited because they need a plumber and they trust me to fix their pipes. JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: That's a pretty good analogy. I do not think when they scheduled that NRCC fund raising there last night, they realized it would be in the midst of this global economic turmoil, the black-tie dinner there of the president saying, I know what I'm doing that certainly will play in ads the midterms.

But that aside, it is an open question, because there has been so much mixed messaging from the White House. The advice, the different advice that is coming into the president's ear is clear. I mean, we've seen it. We've seen it to play out with Elon Musk, of course, going after Peter Navarro. Scott Besant, the Treasury Secretary is trying to keep the markets at bay every morning.

You know, just you can set your watches to the fact that the Treasury Secretary will speak before the markets open every day this week. So, look at the end of the day here the president, I think, to David's point, has not yet felt any political pain, but he's heard the blow back from the big donors.

The Ken Langones, the Founder of Home Depot, who was a big supporter, who had some very harsh words yesterday. This is something that I can't recall during the president's shortly during his campaign, really, from early, early on in Trump political life that so many Republicans and his own supporters have been so critical of a specific policy.

So, we will see how steadfast he is on this. But the reality here is, yes, they're opening the door to all these deals, but that doesn't solve the biggest problem of all, that's China.

BASH: Yeah.

ZELENY: And they are hoping that the U.S., by negotiating with Japan and South Korea and others, they can kind of work together against China. That is very, very much an open question. What type of Pandora's Box he has opened here with China?

CHALIAN: And striking deals may not necessarily avoid recession at this point.

HENDERSON: Right.

ZELENY: It's a totally different thing. You're right.

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BASH: You mentioned Scott Besant, the Treasury Secretary, setting your watch to the fact that he's on in the mornings. Let's roll the tape from this morning.

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SCOTT BESSENT, TREASURY SECRETARY: Last four decades, basically since I began my career in Wall Street, Wall Street has grown wealthier than ever before, and it can continue to grow and do well. But for the next four years, the Trump agenda is focused on Main Street. It's Main Street's turn.

(END VIDEO CLIP)

BASH: So, David, this is -- this was kind of a clip and send out by the White House. Meaning, you know, we don't always know exactly if the people who are speaking for the president are really speaking for the president. The White House is happy with this messaging Main Street versus Wall Street.

Like, don't focus on the stocks, focus on what's going to happen on Main Street. That leaves a big gaping hole of a question, though, which you alluded to earlier, which is what happens at the kitchen table. Examples that we have that are directly related to Main Streets, prices expected to rise as a result of these tariffs, coffee, fruit, cheese, olive oil, plastic wrap products.

CHALIAN: Yeah. And when prices go up, that will be in direct contradiction to what voters were voting for when Donald Trump returned to the White House for the second time, which was to deliver on a promise to bring prices down, to make the everyday cost of their lives more affordable.

If that does not happen, and his -- by his own policies, his own doing, creates prices to actually go up. That is a political problem that even typical Trump bluster spin bond with his base may not be able to maintain.

BASH: And let's look at or listen to some of what Republicans have said about this. And I think the first one I'm going to play is Senator John Kennedy of Louisiana, and it speaks to the thing that we have to emphasize over and over again. This is unilaterally done by the president, a policy that he wants to be put in place. Listen to what Senator Kennedy said about that.

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SEN. JOHN KENNEDY (R-LA): President Trump has been -- he's been -- he's been a Rottweiler here, but now he's the Rottweiler who's caught the car, and that's the moment that we're in now. My question is, what is he going to do with the car?

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BASH: Then you have people on the GOP side who are expected to be on the ballot in 2026, in purplish states. Tom Tillis is one of them. Here's what he said.

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SEN. THOM TILLIS (R-NC): So there, let's say from 60 to 65 people, looking at their 401 K statements. They did vote for President Trump. They voted for me. I hope that they will again in both cases. Well, maybe the president -- not the president, but I intend to run for re- election. I'm just trying to figure out if they're going to feel good about this.

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BASH: Jeff, this was the point that Nia was making about the fact that the stock market, you can say Main Street versus Wall Street, but the stock market is intertwined with people's lives way more than just looking your stock portfolio.

ZELENY: Of course it is. And to David's point about the recession now, I mean, it is hard. It used to be, and not that long ago, just a few weeks and months ago, it was difficult to find economists who would -- who were really sort of very worried about an immediate recession.

Now it's the opposite. It really has changed. There are so many forecasts of recessions coming in the next quarter or the next quarter, so that does affect Main Street. Absolutely affects Main Street. So yes, there are differences. And yes, the very wealthy and successful Treasury Secretary can give a speech to the American Bankers Association talking about the difference between Wall Street and Main Street. But the reality is, we live in a very inter connected economy. So, everyone will feel this.

HENDERSON: And listen, folks on Main Street have become accustomed to cheap goods from China and other places.

BASH: Yeah.

HENDERSON: TVs for $200 you couldn't get that when we were growing up. The other thing that this president is promising is jobs, right? Is it worth it to up in the global economy for HVAC Jobs, right? Which is what Howard Lutnick is talking about, that these factories will be largely automated, but then there will be mechanics who are, I guess, fixing the machines and fixing the robots and the HVAC systems. So, they are making big promises when they can deliver is still an open question.

BASH: President Trump's quest to get his one big, beautiful bill, which includes his tax cuts through Congress, is hitting some rocky roads right now in the House of Representatives. Will be -- will he be able to twist arms of House Republican holdouts? Stay with us.

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TRUMP: But just in case there are a couple of Republicans out there, you just got to get there. Close your eyes and get there. It's a phenomenal bill. Stop grand standing. Just stop grand standing.

(END VIDEO CLIP)

BASH: That was President Trump putting the pressure on House Republicans at their own fund-raising dinner last night. He's only been ratcheting up the pressure even more this morning. He promised quote, the USA will soar like never before, while demanding his one big, beautiful bill get passed, and said it was imperative the bill pass now exclamation point for our country to boom.

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But some Republican hard liners are still balking at the Senate passed budget bill that would see trillions in tax cuts with no budget cuts, spending cuts to pay for it. CNN's Manu Raju is, of course, on Capitol Hill. What are you hearing right now? The key question is whether or not Speaker Johnson has found those Republican votes to move forward?

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Yeah. Look, it depends on who you ask. Republican leadership is actually confident that they can get there, but then the hard liners and the holdouts are saying that he can't get there and he does not have the votes.

I just talked to one of those hold outs as Congressman Tim Burchett of Tennessee. He told me there are more than a dozen Republicans who plan to vote against this. He said that he plans to vote against it. Now he has threatened to vote against previous budget plans and ultimately voted yes. And as you have other holdouts.

And I asked him about that, and he said, look, this is different because of the debate over spending cuts. And that is really the rub here, Dana. The House -- the plan calls for about $1.5 trillion in spending cut and they sent it over to the Senate. The Senate changed it completely and said that they could -- they were calling for at least $4 billion in spending cut.

So, that major discrepancy has caused significant concerns within the ranks on the far right at the House Republican conferences. Why they're threatening to sink it later today? One of those hold ups is Congressman Andy Biggs of Arizona, who I just caught up with, and I asked him if he's ready to support this plan.

(BEGIN VIDEO CLIP)

REP. ANDY BIGGS (R-AZ): The plan is unserious, I think is the bottom line. And here to look at the Senate plan, what we see is they want -- they're proposing $4 billion and it cuts over 10 years. We got a $2.25 trillion a year structural deficit that needs to be addressed, and they're not really addressing that.

RAJU: But how? But given that, how could you possibly get to yes?

BIGGS: Well, I continue to talk and continue to work see what we can find out.

(END VIDEO CLIP)

RAJU: And that openness has given Republican leaders some hope, because they can only afford to lose three Republican votes on any straight party line vote, so they need to flip a bunch. And Dana, as you know, this is why this is so significant.

The House and the Senate need to adopt identical budget blueprints before they can advance the legislation which it would implement a wide part of the Trump agenda, sweeping overall, the tax code, new immigration enforcement measures, those spending cuts that are being debated right now.

They have to actually draft those details and pass it through the House and the Senate, and they could do that along party lines in the Senate, if they use this process, which is why this vote today so significant, if they get -- gets derailed, it could only delay getting the Trump agenda done, Dana.

BASH: It's so significant, but this is not supposed to be the hard part, as you were mentioning.

RAJU: Yeah, exactly.

BASH: Manu, I know that you have some new reporting about the tariffs and how that's playing into an even bigger fight over the budget. What are you hearing?

RAJU: Yeah, that's right, because it's part of the budget you need -- they need to pass a first procedural vote. It's known as the rule in the House that allows them to advance to the final vote on the budget. But tucked into this rule, the House Republicans included language essentially deny an effort by Democrats to target the Trump tariffs, essentially turn off the Trump reciprocal tariffs.

There's been a push among Democrats and some Republicans too, who are concerned about this, to try to go after it and vote on the floor. But the move by the leadership essentially nullifies that effort. But they had to prove that rule first in order for them to essentially quash any effort to go after the Trump tariffs, Dana.

BASH: All right. Manu, thanks, as always, for your terrific reporting. And tonight, as President Trump's policies reshape America, Democrats are searching for momentum and a path forward. What is next for the left Senator Bernie Sanders will join Anderson Cooper to take questions in a Town Hall that's tonight at 09:00 p.m. on CNN.

Coming up, Texas hold on John Cornyn is going all in on attacking his new Senate Republican opponent calling Ken Paxton a quote con man and a quote fraud. We have the details on this exploding, brand new Republican rivalry after a quick break.

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BASH: Today, Texas is giving us a spicy preview of one of the most contentious Republican primaries to come. Texas Attorney General Ken Paxton officially said he is challenging Veteran Republican Senator John Cornyn. That announcement came overnight.

Paxton is a MAGA Star and close ally of President Trump. He was indicted for securities fraud and impeached over bribery allegations that involved an extra marital affair. Paxton has denied any wrongdoing. He also reached a plea deal in the fraud accusations, and he was acquitted of impeachment charges by the Texas State Senate.

Now, incumbent Republican John Cornyn has held the seat he is in for more than two decades. His team was quick to respond to the challenge, saying, quote, Ken Paxton is a fraud. Ken claims to be a man of faith, but uses fake Uber accounts to meet his girlfriend and deceive his family. This will be a spirited campaign, and we assure Texans they will have a real choice when this is over.

Now, notably, CNN has reported that Senate Republican Leaders are asking President Trump to endorse Senate Cornyn. My panel is back now. Nia?