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Inside Politics

Trump Holds Cabinet Meeting After U.S. GDP Shrinks; Navarro: GDP Report "Should be very Positive News"; GDP Report Shows First Quarterly Contraction Since 2022; U.S. Economic Growth Sharply Declines in First Quarter; Secretary of State Rubio has Been in Touch with Salvadorian President about Abrego Garcia. Aired 12-12:30p ET

Aired April 30, 2025 - 12:00   ET

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

[12:00:00]

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DANA BASH, CNN ANCHOR, INSIDE POLITICS: Welcome to "Inside Politics". I'm Dana Bash in Washington, where President Trump is holding a cabinet meeting right now. And that meeting is happening on the heels of a crucial new report showing the U.S. economy shrinking for the first time in three years.

The GDP fell at a rate of 0.3 percent as President Trump's massive and ever-changing tariffs rattle consumers and businesses. Moments ago, on his 101st day in office, the president tried to pin this data on his predecessor.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: Core GDP, and this is, you know, you probably saw some numbers today, and I have to start off by saying that's Biden. That's not Trump, because we came in on January, just the quarterly numbers. And we came in, and I was very -- against everything that Biden was doing in terms of the economy.

(END VIDEO CLIP)

BASH: I want to get straight to the White House. CNN's Kevin Liptak, is there a lot of spin, which is a normal thing to happen on any given issue from any president, but this feels different considering the fact that the economy is in such a precarious situation right now, and it does all have to do with the president's very specific policies.

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yeah, and when he tries to blame it on Biden, you know, that's not a surprise in a lot of ways, but when you dig into the numbers of this GDP report, the ones that contributed to this negative print are specifically related to Trump's own policies. There was one that surge of imports as businesses essentially try and make a front run on the tariffs to avoid those new tariff rates.

That's part of what drove that reading down. The other was a drop in government spending, which is something that Trump has actually advocated for through the DOGE program, through Elon Musk, this chain saw going through the federal government. Those two factors are part of what drove that negative reading.

You know, the president mentioned there this idea of core GDP, which is not sort of illegitimate. You hear even from Democratic economists like Jason Furman, he was the Obama economist, who point to this idea of core GDP as a better indicator of where the economy is heading. That includes consumer spending, private investment, both of which had relatively positive readings in this report.

I think the difference here, in the difference that those economists say, is that it doesn't necessarily provide an indication of where this particular economy is going. You know, this report is backwards looking. It didn't necessarily account for some of the back and forth on these tariffs, which is causing so much chaos in the economy, so much uncertainty for businesses.

So even when you're looking at that core GDP number that the president is pointing to here, it doesn't necessarily account for sort of the turmoil that this economy is now in, Dana.

BASH: Yeah, all so true in such important context, Kevin, please let us know, as this cabinet meeting continues, if he begins to take questions, and if there's anything that we need to know. Appreciate it, Kevin. And I'm joined here by some amazing reporters, CNN's Alayna Treene, Susan Glasser of "The New Yorker", Nia-Malika Henderson of CNN and Bloomberg and CNN's very own, Phil Mattingly.

Phil, pick up where Kevin left off on the context here. And also, most importantly for us here, the political implications for where we are right now in the economy.

PHIL MATTINGLY, CNN ANCHOR & CHIEF DOMESTIC CORRESPONDENT: Yeah, look, I'll be candid. I'm a little annoyed with Kevin. His explanation was quite good. Leave a lot here. This is kind of my bailiwick guy needs to stay in his lane. The top line number is not one you should focus on. That is a reality here.

What, I think the most concrete takeaway from this GDP print is the economy going into April 2, the so-called Liberation Day, was solid. And we have seen that across the numbers, whether it's jobs, whether it's wages, whether it's investment, going into that moment it was solid in preparation for that moment is where you saw kind of the core of how things were driven within this report, which is an absolute, almost once in a generation, surge in imports.

[12:05:00]

Mostly economist believe, because companies were trying to front run -- are trying to pull forward essentially all their purchases, that private investment is real. The concern is that that's not actually going to be maintained over time. It's not going to be consistent, because they're trying to pull it forward.

Consumer spending solid, but it did start to drop a little bit, and we've seen that through a number of surveys. So, if businesses are trying to run, buying huge amounts of equipment, bringing things in imports, and consumers are starting to slow down, and businesses aren't going to keep spending like that because of the uncertainty, because they don't know where the tariffs are going to be in the weeks and months ahead.

The reality is, when economists look forward, including this report, they're saying this is a very, very uncertain moment, but the idea that this is all about Biden, or as Trump said in his Truth Social post, says nothing to do with tariffs. It is very much about Trump, and it has everything to do with tariffs.

BASH: And I also want to say we did hear the president talk a lot about immigration at the beginning. We're going to talk about that after a break, but I do just want to stick with the economy, because that is far and wide the biggest issue for Americans right now. Understandably, you mentioned the tariffs and how that is very much a factor here.

Listen to what Peter Navarro, who is one of the president's top economic advisers, a bullish supporter of tariffs across the board, said on CNBC this morning,

(BEGIN VIDEO CLIP)

PETER NAVARRO, TRUMP SENIOR COUNSELOR FOR TRADE & MANUFACTURING: That's the best negative print I have ever seen in my life. And the markets need to like look beneath the surface of that we had a 22 percent increase in domestic investment that is off the charts. When you strip out inventories and the negative effects of the surge in imports because of the tariffs, you have 3 percent growth. So, we really like where we're at now.

(END VIDEO CLIP)

BASH: You said it out loud, there is a negative effect. You were explaining why, but there is a negative effect right now on the economy, as the economy braces for these tariffs to get even steeper, as they were, they're already in place.

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Right. And there's some other things he said during that interview as well that I found super notable. He mentioned the exact point that you made, Phil, which is that so many companies and businesses were stockpiling on imports in preparation for tariffs.

He tried to spin that as a good thing. He said, look, you know, people are getting ready for the tariffs. Tariffs are a good thing. As the economy moves on, we'll see that these tariffs end up being good for the economy. And then he also talked about DOGE, which I found interesting.

He said some of this is also impacted by the contracting of what we're seeing in the federal government. And so, he's trying to spin it that way, all to say, I can tell you, and I know this very clearly, that you know, the White House is clearly trying to take a victory -- this week by marking the president's first 100 days.

One area where there is a lot of frustration, anxiety, though, behind the scenes is on the economy. They know that they need to deliver good news to Americans soon. That's why you're starting to hear from some people like Treasury Secretary Scott Bessent some others. They're trying to preview that there's going to be some sort of deal very soon, whether on India this week or next week.

BASH: Yeah.

TREENE: It's because they know they need to give some optimism right now.

BASH: They need a deal.

TREENE: Exactly.

BASH: I had Wall Street sort of executives say that to me point blank, that at least one deal that that will at least show that something is happening. And as I bring you both in, I just want to remind our viewers of what the American people think and feel which is -- what it is --

SUSAN GLASSER, STAFF WRITER OF THE NEW YORKER: Yeah.

BASH: It's all about feeling when it comes to politics, about the economy, 71 percent say that they believe that the economic conditions are somewhat or very poor, 71 percent.

GLASSER: Yeah, fear and uncertainty might be a good way to scare illegal immigrants from coming to the country, but they don't work very well when it comes to America's business leaders making important decisions about the future of their businesses. And you know, look, obviously, you can't be taking a victory lap when the American economy is contracting and not expanding.

Let's just be real about that. There's no victory here, a man who has branded himself for decades in our national public consciousness as a deal maker. Not only is struggling, but he's made such wildly over the top claims. You know, we're 100 days into a presidency where he said he would end the Ukraine war in 24 hours.

He can't, you know, despite making concession after concession, can't get Vladimir Putin to go along with his vision for that. When it comes to the economy, I think what's remarkable is that even after Trump's approval ratings have plunged, after all of our economic indicators have started flashing red since April 2 that quote, unquote, Liberation Day, we still can't say what exactly is the policy.

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We still can't say what's going on. And so, you have this moment Trump is in the cabinet meeting with his sales men pitch men pitching a vision. But no one you know can say with certainty what the actual policy is. What they can tell you is that uncertainty is already proving to be its own form of toxicity in our markets.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL ANALYST: Yeah, and listen as I think Trump benefited from the fact that the economy is a feeling for people. It is deeply personal. It's about what you do when you go to the target or to Amazon and look at a price. Is it higher? Is it lower?

Do you want to save a little bit now for fear that prices are going to get higher a little bit down the line? And so, there's no number of deals from India. There's no about of talking about the GDP and saying that it's Biden's fault. That's not how people think about the economy. So, this sort of sales and pitch that you saw them making about industries coming here, and there's going to be a plant in Arizona.

What does that have to do with whether or not I think I can afford sending my two kids to camp in the summer. If I have two kids, I only have one, she will be going to camp, but it's going to be very expensive, but that's how people are thinking about the economy. And so, you know Peter Navarro and Howard Lutnick, with their bluster, it just doesn't work.

And particularly because Donald Trump promised that prices would be lower immediately, right, and that there would be stability in this golden era. And that is not happening.

BASH: I just want to get one other point in here, which is on the politics of this, how much on this? Just like pretty much everything else the party has gotten behind Donald Trump. I mean, he was very clear. Tariffs are what he wanted, and that is what he is doing. The party has, in my time here has been much more free trade.

And that includes his former vice president, who decided to pen an op- ed in "The Wall Street Journal" today. And here's part of what he said, since the president announced his Liberation Day tariffs, the only thing America has been liberated from is trillions of dollars in investments.

Mr. Trump's proposed tariffs would be the largest peacetime tax hike in American history, hammering consumers and driving inflation. Broad based tariffs may scratch the populist itch, but protectionist economics are no substitute for principled conservatism. Real quick, Phil, what's going on here?

MATTINGLY: That was what the Republican Party was.

BASH: Yeah.

MATTINGLY: That, to be frank, is what the vast majority of Republicans on Capitol Hill still are privately in places where the president can't hear them. They agree with the kind of broader concept, particularly as it pertains to China, on these issues, in terms of the approach that was taken, the scale of the approach that was taken, and what's transpired since.

There's widespread disagreement, and yet a recognition that won because of Trump's grip on the party politically, but also because -- we're in it.

BASH: Yeah. MATTINGLY: We got no other choice. This is where we're going, and that obviously, is what they're stuck with.

BASH: Yeah, I think it's also the subtext is this didn't happen when I was the vice president, because I made these arguments internally. Standby, coming up I could, but I won't. President Trump admits he has the ability to bring home a man mistakenly deported to El Salvador, contradicting his administration's position in that high stake court case. We have details next.

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BASH: And we're back with breaking news on the case of Kilmar Abrego Garcia, the man who the Trump Administration mistakenly deported to El Salvador's notorious mega prison. Secretary of State, Marco Rubio and El Salvador's President have been in touch directly about Abrego Garcia's detention.

That's according to multiple sources familiar with discussions. CNN's Priscilla Alvarez joins me now. Priscilla, I know you and our team have been reporting on this. What are you hearing?

PRISCILLA ALVAREZ, CNN CORRESPONDENT: Yeah, Dana, multiple sources telling us that these were discussions that were happening all the way at the top with Secretary of State, Marco Rubio and the Salvadoran President Nayib Bukele again about the detention of Kilmar Abrego Garcia.

Now a U.S. official tells me that the Trump Administration had been working closely with El Salvador, had inquired about Abrego Garcia's return, but insisted that the Salvadoran President had stated, as he did in the Oval Office, that he was not planning on returning Abrego Garcia recall that during that Oval Office meeting between President Trump and the Salvadoran President.

He was quite blunt in saying he had no intention of returning him. Now all of this, of course, is happening against the backdrop of that legal battle between the federal judges as well -- the federal judge as well as the Justice Department and Abrego Garcia's attorneys. Now, as far as the state of play for that case, there had been a seven day pause in discovery that had been agreed to both by the Justice Department and Abrego Garcia's attorneys.

We didn't know why that was the judge did not say so, but that deadline is today. After today that could resume again, that being the discovery as well as the daily updates. Now what it all needs for his return or not, still unclear, Dana. What we know so far is that he has been moved from that notorious mega prison to another detention facility in El Salvador.

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But his faith still appears to be up in the air. Dana, I'll also note that this is something that Americans weighed in on in our CNN poll, with 56 percent of Americans saying that Trump should work to bring him back, Dana.

BASH: OK, Priscilla, thank you so much for that. Of course, this reporting is happening on the heels to ABC News in the oval office yesterday. We're going to talk about all of that, this breaking news with our terrific panel here when we come back.

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BASH: Welcome back to "Inside Politics". We want to pick up where we left off before the break on new reporting from our colleagues, including Priscilla Alvarez and Alayna Treene, who we happen to have here on the panel about a phone call that the Secretary of State, Marco Rubio had with the Salvadoran President.

Pick up a little bit on more of the reporting, and if you will, not to sound too skeptical. But I'm going to be skeptic here, which is how real do we think this phone call was in terms of an earnest effort to get him back, versus he's trying to facilitate put the phone call in, meaning how much of it was theater.

TREENE: Right. And I will also know just at the top of this. I mean, I was just speaking with White House officials about this, this morning, the president himself is actually not very involved in any of this, which is why I think sometimes he sounds ill-informed when he's giving these interviews, like we heard last night.

All to say yes, so we -- what we've reported as Priscilla laid out is that Secretary of State, Marco Rubio has been having conversations privately with Bukele the El Salvador President on this. There was a possibility last week that there could be some sort of diplomatic way to try and bring Abrego Garcia back.

But as you mentioned, it's still very much unclear. Is this a real thing? Because, of course, simultaneously, Trump's attorneys, DOJ lawyers, are still battling with the courts. They're going to be back in court today over you know, whether or not they are wrongly -- not going along with what the Supreme Court ordered, which was to facilitate his return.

So, some of this could be, you know, we are reaching out to El Salvador. The El Salvadoran President says, no, it's out of our hands. And that's kind of the vibe that we've been getting in some of our conversation.

BASH: Susan, you have been covering diplomacy from here and from far flung corners of the globe for years. What's your take?

GLASSER: Yeah, you know, Donald Trump has a habit of saying the quiet part out loud. And yesterday, in his interview with ABC News, he told us very clearly, I think, what is the bottom line, which is that if Donald Trump picked up the phone and told the Salvadorans to release this man, he would be on a plane and he would be back here right away.

His administration is in a state of non-compliance with a 90 Supreme Court decision. And it's very important, I think to you know, there are a lot of legal maneuvers in the case, and we'll see in court what they argue at 05:00 p.m. today. But I think again, Donald Trump has told us very clearly a reality check, which is that the United States sent the man there, provides an enormous amount of financial support on which these migrants are being shipped to El Salvador.

By the way, the legality of that itself is under question, even putting aside the case of this one man that the United States has already acknowledged was wrongfully shipped there.

BASH: Let's listen to the moment in that interview that you're referring to.

(BEGIN VIDEO CLIP)

TRUMP: This is not an innocent, wonderful gentleman from Maryland.

UNIDENTIFIED MALE: I'm not saying he's a good guy. It's about the rule of law. The order from the Supreme Court stands sir --

TRUMP: He came into our country illegally.

UNIDENTIFIED MALE: You could get him back. There's a phone on this desk.

TRUMP: I could.

UNIDENTIFIED MALE: You could pick it up.

TRUMP: I could.

UNIDENTIFIED MALE: And all the power of the presidency. You could call up the President of El Salvador and say, send him back right now.

TRUMP: And if he were the gentleman that you say he is, I would do that. But he is not.

UNIDENTIFIED MALE: But the court has ordered you to facilitate that --

TRUMP: I'm not the one making this decision.

UNIDENTIFIED MALE: You're the president.

TRUMP: We have lawyers want to do this.

UNIDENTIFIED MALE: -- buck stops --

TRUMP: I -- no, no, no, no, I follow the law.

(END VIDEO CLIP)

HENDERSON: Yeah. I mean, Donald Trump is all powerful, but except in this case, essentially what he is arguing. He absolutely could give him back if he were to order the President of El Salvador to do so. I mean, they're buddies, essentially, you saw that in the Oval Office meeting. And as you said, America is paying them something like $6 million to facilitate the transfer of these folks. It really comes down to due process. That is why Democrats went down there. That is why they are raising this issue. The other thing is, this is yet another issue for Donald Trump that he had the public on his side with immigration.

BASH: Yeah.

HENDERSON: Even as few as, you know, a month ago or a couple of weeks ago, and now with these high-profile cases that they have clearly messed up, that they admit that this was a mistake, but yet they're still being stubborn and not following the rule of law, not following the Supreme Court, not following due process either.

BASH: And it really is, I mean, that is where Terry was focused, rightly so, which is on due process, not on whether this guy is good or bad, whether he was in a gang or not, which of course, Abrego Garcia's lawyers deny, but it is about whether or not he got a hearing. And the answer is no