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Trump Extends Mexico's 25 Percent Tariffs For 90 Days As Talks Continue; Key Trade Deals Still Outstanding As Trump's Deadline Looms; Trump: Canada's Palestinian Move Is A Trade Deal Stumbling Block; Federal Reserve Keeps Interest Rates Steady; GOP Divided Over Release Of Epstein Files. Aired 12-12:30p ET

Aired July 31, 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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MANU RAJU, CNN ANCHOR, INSIDE POLITICS: Today in Inside Politics, full speed bargaining. We're following breaking news on a trade deal extension for Mexico, while dozens of other countries have just 12 hours left to reach an agreement with the Trump administration or face steep tariff hikes. Will the president's gamble make the U.S. rich, as he claims, or leave American consumers paying the price.

Plus, the redistricting rumble. Democrats accuse Republicans of rigging the midterms with their newly proposed congressional maps in Texas. But how will they fight back? I'll speak with a lone state lawmaker directly targeted by the GOP plan.

And Kamala Harris is announcing a book on her fat or failed fast track 107-day presidential campaign, just hours after nixing a run for California governor. So is the book the first chapter of a 2028 campaign.

I'm Manu Raju in for Dana Bash. Let's go behind the headlines at Inside Politics.

We start with breaking news. Hours before the midnight deadline to make a trade deal, President Trump is announcing a 90-day extension for Mexico, one of America's top trading partners. But it's also something he insisted was off the table just days ago.

CNN's Alayna Treene is at the White House right now. Alayna, what are you learning about what led to this delay in this conversation that the president had with his Mexican counterpart?

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: That's right. Well, the president spoke with Mexican President Claudia Sheinbaum today, and he posted about it on X, and that's really what led to this, I'm told. So, he said, in this post, he said that the complexities of a deal with Mexico are somewhat different than other nations because of both the problems and assets of the border.

We have agreed to extend for a 90-day period the exact same deal, essentially the deal that they have in place right now, Manu, is that goods from Mexico are being taxed at a 25 percent tariff unless those goods are compliant with the USMCA trade agreement that he had initially negotiated back during his first term.

Now, I would say he said, you know, for 90 days. He also said later in the post that perhaps it would be longer than 90 days, if that's how long it took. Look what he's doing with Mexico here, and you're right. I mean, Mexico is actually the largest trading partner that America has is different from other countries.

And my conversations with people at the White House about this deadline, you know, there's been a lot of questions on whether or not the president would actually push it back again, like he has done previously over the last several months. But they say this time he's holding firm on that deadline, because essentially, he is now feeling very emboldened by all of the trade agreements that have -- they've been able to strike over the last week.

You have Japan, you have South Korea, the Cambodia, Thailand, many other different, the European Union, for example, all of those really adding to this feeling. I'm told that the president is feeling vindicated behind the scenes from critics who have long argued that these tariffs would tank the economy and global markets.

Now, it's still unclear what exactly, of course, the impact of these tariffs are going to have. They haven't gone into effect yet, but this is one case with Mexico where he's willing to extend the deadline, kind of setting them apart.

He said during that call with Sheinbaum that they've come to understand each other better, and so we could potentially see some movement there over the next couple of weeks. But for now, Mexico, unlike a lot of other trading partners is not going to face higher prices come 12:01 am tomorrow.

RAJU: Yeah, 90 days for Mexico. What about the other countries? That's going to be the big question over the next 24 hours. Alayna Treene from the White House, thank you so much. And I'm joined right now by a terrific group of reporters, CNN's Jeff Zeleny, Seung Min Kim of the Associated Press, and CNN's Eva McKend. Nice to see you all. Nice to see Jeff back stateside after that Scottish trip with the president.

Yes. So, look, the president said this was -- he was firm. He was for -- as Alayna just referred to, just remember what he said yesterday on Truth Social. The August 1 deadline is the August 1 deadline. It stands strong and will not be extended. A big day for America. And then he talks to Claudia Sheinbaum and delays this by 90 days. What are countries and the economy and American consumers supposed to make of this?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Look, and we've learned a lot of things about President Trump and his tariff belief over the last several months. One is flexibility. How many deadlines have we seen come and go, and sometimes they're in force, sometimes they're not. The reason that this Mexico is slightly different.

That phone call that President Trump had with President Sheinbaum this morning, clearly went well from the U.S.'s point of view of this. That's why he's giving Mexico some more time. And Mexico is a bit more unique in the sense of the border asset. So that was his rationale for giving them more time.

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But one other thing really, I would be surprised if there were a lot of other extensions granted for some of the other countries. The president seems particularly angry with a Canada today and does not seem open to extending something.

But look, we often have to wait and see and put everything in pencil, not ink, because these trade policies change, but we've seen a through line here. The 15 percent now is largely a baseline. We saw the president ink that deal with the European Union earlier this week. Japan's 15 percent, so that is sort of where it is.

All of this is happening, of course, as his whole idea of tariff authority is being challenged in court. That hearing is going on as we speak, so that will also be interesting. But his consistency on tariffs is true, but he's flexible as well.

RAJU: And speaking of his flexibility, this is what he said on July 7, when he was asked about the August 1 deadline.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Is the August 1 deadline from you? Is that it or could you move it again?

DONALD TRUMP, PRESIDENT OF UNITED STATES OF AMERICA: I would say firm, no. I would say firm, but not 100 percent firm. If they call up and they say, would like to do something a different way, we're going to be open to that.

(END VIDEO CLIP)

RAJU: I would say firm, but not 100 percent firm.

SEUNG MIN KIM, WHITE HOUSE REPORTER, AP: Right, right, which goes to Jeff's point about the whole flexibility aspect of this. What I've also been -- what I thought was about interesting, about this administration's negotiation strategy is how Trump goes really aggressive, really goes all in threatens, you know, trading partners, our allies with very high tariff rates. And then, you know, kind of stokes fear in those countries, and then comes back with more favorable terms for the United States.

I mean, for example, South Korea. They were facing a 25 percent tariff. Now they've negotiated that that down to 15 percent. But what's also interesting in these tariff agreements is that the president is scoring some wins that are -- that are independent from those tariff rates. And at least two of the recent deals with the E.U. and with South Korea. There's a provision in there that says, these countries will buy U.S. energy, which is a huge win for the United States, obviously key for lawmakers representing those oil rich states.

I believe the -- I believe the E.U. is about $250 billion over three years, South Korea is $100 billion. And even the E.U. -- or even the E.U. European Commission president said this was a win for Europe as well because they're still very reliant on Russian oil in a backdoor way. So, I think that is kind of an under discussed part of what he's doing here. He's getting tariff rates that are lower than what he initially threatened, but he is getting some other wins that go beyond those specific rates.

RAJU: And look at the -- some of the announcements that he has made so far with some of these trading partners. There -- you know, some of the details on these are just, there's frameworks or outlines, but this is what Seung Min was alluding to includes 15 percent with South Korea, down to 15 percent with Japan, 10 percent for the U.K. But Trump comes in very high. Then they'll reach an agreement somewhere here, lower than very high, but still higher than it was last year in terms of the tariffs on these other countries.

EVA MCKEND, CNN CORRESPONDENT: That's right. Many people are --

RAJU: So, then the perception is that he's getting them to do something favorable to the United States, but still higher than it has been historically on all these other countries.

MCKEND: That's right. You know, as we all are watching this, we are just wondering, is there a means to an end here? Is it worth disrupting the economy? Is this ultimately going to result in more manufacturing jobs, which was the stated goal? So, time will tell if all that plays out. But in the meantime, some key companies in this country are raising their prices as a result of this tariff policy.

RAJU: Chairman today announced that they would move ahead with in August, with the number of household goods.

MCKEND: That's right. And so, if things like pampers go up in cost and other critical household goods. How much of an appetite are Americans going to have for this tariff policy to continue?

RAJU: Yeah. And what's you mentioned this, Jeff, about Canada. He's using it also to force a policy change as well beyond just a trading dispute. This is what he said on Truth Social about Canada. He said, wow, Canada has just announced that it is backing statehood for Palestine that will make it very hard for us to make a trade deal with them. Oh, Canada. At 12:29 am, he posted that this morning. But this is not just a trade dispute. This is him saying that he's going to try to use this to force his position on Canada when it comes to the Middle East.

ZELENY: The president's unique obsession with Canada and his unique sort of wish to sort of load over it, is a through line for all of these things. But he was not as pointed in his language against the U.K. And a day after meeting with British Prime Minister Keir Starmer, he also said that they will recognize Palestine as a state if there is not a permanent ceasefire. And the president was not nearly as sharp about that.

[12:10:00] But look on Canada, it is a very important trading relationship, and it's something that sort of stands apart when you talk to advisors because the president still has in mind this idea of kind of bringing Canada into the fold of the U.S., which of course, is never going to happen. But that kind of makes Canada a bit of an outlier in terms of how he sees it.

RAJU: Let's look at how some of Trump's top officials and his advisors and in the cabin are talking about the president's handling of this issue.

(BEGIN VIDEO CLIP)

HOWARD LUTNICK, COMMERCE SECRETARY: I got all these phone calls from my Wall Street buddies, and they were going crazy. They're like, you don't know what you're doing. You're going to destroy the market. You're going to destroy this and that, and they were all blowing up the internet. They all are experts. And let me tell you who the experts are. Donald Trump and his trade team have proven the E.U. pays, Japan pays, Korea pays, Vietnam pays.

PETER NAVARRO, WHITE HOUSE COUNSELOR FOR TRADE AND MANUFACTURING: A lot of people, Maria, talk about Donald Trump for the peace prize, the Nobel Peace Prize. I'm thinking that, since he's basically taught the world trade economics, he might be up for the Nobel on economics.

(END VIDEO CLIP)

RAJU: Nobel on economics. How does the American public feel? This is, according to a recent CNN poll. He's underwater, significantly, and tariff is one of his worst issues, 39 percent approve of his handling of that 40 -- just 40 percent on the economy, which of course, has seen that is support for that erode amid all this uncertainty.

KIM: Right, right, lots of uncertainty. And uncertainty is another facet with a lot of these deals that have already been struck. I mean, the European Commission said today that they're still waiting to strike agree to language on a joint agreement between the two countries that would basically outline how this agreement would be executed. So, there's still a lot of fine print that has to be filled in with even the countries that have -- countries and blocks that have struck a deal with the United States.

RAJU: Yeah.

MCKEND: I would agree, is too soon to gloat. These relationships have never been so fragile.

RAJU: Yeah. And the impact we'll see in the economy, maybe won't be as bad as a lot of comments have been concerned about. Maybe it will be. And then we'll see how the president adjusts.

All right, coming up. President Trump's flirtation with the idea of firing Fed Chair Jay Powell scared some of his own party, but some other Republicans seem to support it. Does President Trump have enough support on Capitol Hill to oust Powell? Republican Senator Jim Banks, joins us live, next.

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RAJU: President Trump is furious with Fed Chair Jay Powell, after the Federal Reserve opted to keep rates steady in its July meeting. He took the Truth Social instead of Powell, quote, he is too late and actually too angry, too stupid and too political to have the job of Fed chair.

Well, my next guest is on the Senate Banking Committee that conducts overnight of the Fed, GOP Senator Jim Banks of Indiana, joins me now. Thank you so much for coming on, Senator.

SEN. JIM BANKS (R-IN): Good to be with you.

RAJU: Absolutely. So, as you know, Trump has been berating Powell for months and months, and there's been a big push from some folks in your party on the right to fire Powell. What do you think, is it time for the president to get rid of Jay Powell?

BANKS: Well, Powell's days are numbered, one way or another. I mean, President Trump and his administration is already vetting and looking at candidates to replace Powell, whether that comes now or when his term expires in a little over, I think a year or so.

RAJU: Should he wait -- should he wait till that term ends, do you think?

BANKS: I'm disappointed too, and I know why the president is frustrated. All of the reasons that Powell has given us why interest rates haven't gone down have been wrong. I mean, he's testified before the Senate Banking Committee. I've met with him in private in my office. He blames tariffs, he blames inflation, but the facts speak for themselves.

Inflation has dropped to the lowest we've had since the first Trump term, around 2 percent, remember it was double digits during the Biden administration. And then the jobs announcement, $6 trillion of investment because of tariffs. The revenue generated from tariffs. Tariffs have been a net benefit for our country at this point, and the tariffs are going to keep proven to be with the trade deals that President Trump is crafting is going to end up being a net win for America.

So, Powell's days are numbered, one way or another. If the president fires Jerome Powell, then I support that move. If he wants to wait until Powell's term expires and replace him with someone better. There are good candidates that are out there.

But one last point, the Fed -- the Fed governor's meeting this week was historically significant because it was the first time in over 30 years that there was a dissenting vote, and there were two of them, two dissenting votes against the chairman in favor of lowering rates. We need to lower rates to help families, to help families afford a house, and that's why President Trump is frustrated.

RAJU: Senator, you mentioned, one of the reasons that Powell's cited for not cutting rates is the uncertainty over inflation drying (Ph) because of the uncertainty over Trump's tariff policies, economists do say that the uptick in inflation last week -- last month did show some signs that tariffs were being passed on to consumers.

But I want to ask you about the politics of this, because in a July CNN poll, the American public really did have a sour view of those tariff policies. Trump is underwater by 22 percent on that issue, just 39 percent of the public approve of him on tariffs. So, I'm wondering, is your party on the wrong side of public opinion on this issue?

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BANKS: No. And I'll tell you, nowhere in the country has benefited more from tariffs than a manufacturing heavy state like Indiana. I mean, we've had so many announcements there, too many to mention in this segment, from GM creating more jobs and more overtime for workers to Honda Civic announcing that they're going to be -- Honda announced that they're going to make the next generation civics in Indiana, not in Mexico or China, because of the tariffs.

Eli Lilly $27 billion in pharmaceutical manufacturing in Indiana and in America, instead of in China. And that's the big news here too, that China's economy and their industry is faltering and America's industry, our manufacturing base and investments in technology in the United States of America are increasing. And that's the big story that over time we will tell that America will see clearly, even the New York Times had an editorial on their liberal editorial page today saying all the experts were wrong. The sky isn't falling. Tariffs have been good and they're going to continue to be good for America.

RAJU: But very quickly, Senator, because some companies like Charman, saying that they're going to raise prices on goods, household goods. Are you -- such as toilet paper, dish soap and the like. Are your constituents really willing to stomach higher prices because of these policies?

BANKS: What my constituents are happy about is the number of good paying jobs that are coming back to the United States of America, steel mills and automotive factories in Indiana. That's what we're seeing the increase in pay, the best blue -- the biggest blue collar pay increase in 60 years because of Donald Trump, due to his economic policies, like the tariffs that we've seen in a very long time. That's what matters most.

And these companies that are -- that are threatening to raise prices, the trade deals, the deals that President Trump is landing every day, it's going to smooth out again. He always said this is going to be a bumpy ride, but in the long term, this is going to be better for our kids and our grandkids and that's all proving to be true.

RAJU: Senator, I want to ask you about some news in the Senate. Yesterday, a Senate committee approved a bill that would effectively ban stock trading by members of Congress. Wondering what you think about that, given that lawmakers do get briefed on highly sensitive information. Do you think that it is time to ban stock trading by members of Congress?

BANKS: Well, insider trading is already illegal, and members of Congress report, we report our investments. And you know, my wife and I go through this process every year. It's a very transparent process. Members of Congress should never trade stocks based on information that they receive. And if they do that that's already illegal. They should be prosecuted for it.

RAJU: But what about a ban -- a total ban, a total ban on trading?

BANKS: Yeah. I support that, especially for -- if you're on a -- if you're like, like on a committee, like I'm on the banking committee or the Armed Services Committee, you shouldn't be trading stocks when you have insider information or know where investments are going. And Nancy Pelosi, last year, by the way, a 5 percent return on her investments and her stock trades.

Last year, she's been the one that the public, more than anybody in Washington D.C. knows that Nancy Pelosi benefits from her job on Capitol Hill, or questions about that, and there are serious questions about that that should be investigated. That's what the committee hearing was about yesterday. An amendment to dig into Nancy Pelosi's stock trades that unfortunately -- that unfortunately failed, but they should pass because there are serious questions in regard to that.

RAJU: And she supports this bill that did pass the committee yesterday. The president did criticize your call -- Republican colleague, Senator Josh Hawley, for backing that bill and for opposing that amendment. He berated him as second tier senator. He also, on a separate matter, attacked Chuck Grassley, reposting attacks against Chuck Grassley. Are you comfortable with the president leveling these very personal attacks against your Republican colleagues?

BANKS: I understand why President Trump is frustrated. We have a backlog of under -- over 150 nominees --

RAJU: And I'm talking about the personal, making it personal -- making it personal against your colleagues.

BANKS: I don't think this is personal, President Trump, he calls balls and strikes. He's always done that and the American people listen to President Trump, whether it's a Republican or a Democrat, he's holding all of us accountable to do what we were elected to do. And President Trump knows we're six months into a four-year administration.

We've got to get more done. We have to be faster. We've already done big things with the big, beautiful bill that no tax on tips and no tax on overtime and extending working class tax cuts for American families, but there's so much more to do, and that's why President Trump is frustrated that we're not moving faster and doing even more.

[12:25:00] RAJU: And last, I want to ask you, Senator, about this controversy that's been looming over the White House. That's the Jeffrey Epstein files, the president and his team had promised to release them, and a lot of folks on the right had been hoping that they would be released. They backed away from that promise. Do you think the president should and should be fully transparent, and the administration should do more to release the files?

BANKS: President Trump has been very transparent about. He's ordered Pam Bondi, the attorney general to release the grand jury testimony and the findings --

RAJU: But I'm talking about all the files. Should they release all the files that they have, not the grand jury, what they have?

BANKS: I'm for releasing all of it. Be transparent about it. The victims of Epstein and Maxwell, they deserve justice. And you know, remember, for four years, Joe Biden and his DOJ sat on all this and didn't do anything with it. And remember, before that, in President Trump's first term, the Trump DOJ is who arrested and convicted Epstein and put him in jail.

So, President Trump has been serious about this from the beginning. He's been transparent, released the grand jury testimony, released the findings. He has nothing to hide. I mean, there's nothing -- there nothing there if there was something there, they would have -- they would have gone after him when Joe Biden was in the White House.

RAJU: All right. We'll see what they ultimately decide to do. And if there's a vote in Congress to release this, we'll see as well. Senator Jim Banks of Indiana, thank you so much for joining me this afternoon. Really appreciate it.

BANKS: Thank you.

RAJU: And up next, a plot twist for Kamala Harris. We'll break down her new announcement after a quick break.

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