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Trump Reshapes Global Economy With New Tariffs; Yale Budget Lab: U.S. Tariff Rate Now The Highest Since 1934; Most Economists Expert Tariffs To Mean Higher Prices For Consumers; Today: Vance In Indiana To Pressure State GOP To Redraw Lines; GOP Eyes New Congressional Maps In Indiana, Missouri, Ohio; Blue States Have Fewer Options If Redistricting Escalates. Aired 12-12:30p ET

Aired August 07, 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, at the stroke of midnight, the world economy got an extreme makeover. The U.S. puts a patchwork of tariffs on nearly every major trading partner. The markets are shrugging, but will your wallet be shrinking?

Plus, what happens in Texas won't necessarily stay in Texas? Will GOP attempts to gain seats in the House through redistricting spread to other Republican led states. And John King back on the road in an Arizona heat wave to take the temperature on a potential midterm flash point.

I'm Dana Bash. Let's go behind the headlines at Inside Politics.

We begin the hour with a big bet, one with global consequences. President Trump's tariff, everything everywhere policy is now in play in every port dotting the map. Now, make no mistake, what we are watching in real time is a transformation of the global economy. It's what Donald Trump has been wanting for decades, well before he got into politics.

At 11:58 pm last night, two minutes before the new tariffs took effect. A very excited president posted this, quote. It's midnight, billions of dollars in tariffs are now flowing into the United States of America. And this morning, his commerce secretary claimed there's a big payoff on the horizon.

(BEGIN VIDEO CLIP)

HOWARD LUTNICK, COMMERCE SECRETARY: I think we're going to be heading towards 50 billion a month in tariff revenue that no one has talked about except for the president. These are amazing numbers for the United States of America, and no one is retaliating. Everybody understands you've got to sell to the American consumer. The American consumer is the most powerful factor in the earth for the economy, and Donald Trump is harnessing it for the benefit of the American people.

(END VIDEO CLIP) BASH: CNN's Richard Quest joins us now. Richard, so good to see you. We have been talking for months and months and months about the uncertainty that has come with the on again, off again tariffs, or at least promises or threats to put tariffs in place. It seems as though that certainty is now here. How is the world going to react?

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: It is one giant experiment. That's the best way to describe it. Donald Trump, you're right when you say he's always wanted to do it, and now the experiment has gone live. Billions of dollars will be going into the U.S. Treasury. But where's that money coming from? Well, at the moment, it's coming mainly from the exporters, the importers, the manufacturers, but we are starting to see it being passed on to the consumer.

More and more companies are saying they can no longer just eat the tariff. You know, when the tariff was 10 percent maybe, 15 percent, it becomes harder. Look at these numbers. If you are buying something from Switzerland or from Brazil, and you've got a tariff of 39, 50 percent, 30 percent, you can't expect the producer, the importer, the exporter, to eat that tariff consistently, no, eventually, Dana, it is going to pass through to the consumer.

I think the commerce secretary is right. What I will say is, you know, where does the 500-pound gorilla sit? Wherever it wants to, and that's what the U.S. has basically done. It said we're the largest market. You want to do it. You want to play here. This is the price.

BASH: And I just want to underscore the point that you're making here, which is that, you know, there are a lot of people who are saying, hoping, and in the case of the White House predicting that everything that we are going to see has already been baked into the economy, with regard to the -- to the impact on this. What you are saying is not so.

QUEST: Sorry. I had to start shaking my head, even as you're asking the question, and I could see where you were going. No, absolutely not. Not even close. And the reason I say that, firstly, remember, it's been structured so it doesn't all hit at once. For instance, anything on a ship up till to last night is tariff free, provided it gets here by October.

[12:05:00]

So, we've got these various, if you like, breaker circuits that we had lots of being sent in advance of the tariffs. We've had lots of measures being taken. We've got lots of exceptions, but eventually, look, I've spoken to so many economists, more PhDs than you can shake a stick at, and they all say that this is going to have an economic effect. It's not a question of if it's just a question of when.

BASH: Richard, thank you so much for being here. Appreciate it. And I'm joined at the table by a terrific group of reporters, CNN's Kristen Holmes, John Bresnahan of Punchbowl News, Nia-Malika Henderson of Bloomberg and CNN, and CNN's John King.

John, let's just kind of take it back, as I like to say, open the aperture as wide as we can to the moment that we're in. And it's going back to the idea that this is what Donald Trump has wanted to do for so long. It looks like his plan is now in place. The dice is rolled and we're going to see what happens.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And now we find out what goes forward. I just want to echo what Richard said, and this is based on the travels here in this -- here in the United States, but also some travels a few months back ago across Canada.

The whiplash so far, the turmoil on the market so far, the turmoil among businesses so far, and to a degree, the turmoil among American consumers so far has been about the process because it was the yo-yo tariffs are on, tariffs are off, tariffs are on, tariffs.

Now it's about the policy, and that will take months and months and months to play out. And if you're an American cattle grower, you're happy because you sell -- you want to sell more of your beef here in the United States. If you're an American soybean grower, you're going to have retaliatory tariffs now.

When you try to export to Asia and export somewhere else, you also see, you know, premieres in Canada saying, you know, we've had company countries in Asia calling for our products all the time. We say, sorry, we sell them all to America. They're going to diversify.

So American consumers for some things are going to pay more and for also, to Richard's point about Brazil, those high tariffs, those countries are going to look somewhere else to sell the price. You might not be able to find what you're looking for in the United States. And if you do, you're going to pay a lot more for it.

So, the markets like certainty, even if they don't like tariffs, they're happy that the yo-yo is over. But now you go forward to will prices go up, will prices go down? Will some American employers who lose business because they have retaliatory tariffs overseas have to lose jobs? So, this starts a clock to figure out what it actually means on the economy. So far, it's been all about the process.

BASH: The treasury secretary was on MSNBC this morning. He was asked the question that we are all asking which goes along those lines, which is, who is going to pay for these tariffs? Is it going to be the consumer? Listen to what he said.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, TREASURY SECRETARY: Well, the check is written to the person who receives it at the dock in the US, but the Brazilian exporter could decide that they want to keep market share, they could lower their price so that the full 50 percent of the tariffs say, you know --

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Right, they can be part of the --

(CROSSTALK)

BESSENT: -- which is what we've seen.

ROBINSON: OK, OK, but the check is written by the importer right, at the dock?

BESSENT: Yeah. And then, you know, the importer can pass it on or not.

(END VIDEO CLIP)

BASH: Kristen?

KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: He can pass it on or not. I mean, a couple of things that I think are key here. One, as John said, you're going to look at months and months of how this policy actually rolls out. So, what you're going to see for those months is Donald Trump and the White House taking credit for the fact that there hasn't been a huge economic shift, and they're going to message that over and over again.

Oh, people said that this would be devastating. But look, you haven't seen anything yet. But of course, as you note, the reality is that this is a trickledown effect. The other part of this is that we hear this from the White House a lot, is that some of these major corporations should absorb some of the costs that they're already overcharging, that they are able to absorb it.

But that doesn't account for so many small businesses in the United States that can't even afford today, tomorrow, as soon as this goes into play because they don't have the resources, they don't have the capital. And so, you're looking at two kind of different pathways here.

Of course, it's easy to say a company -- a major company, like Walmart, for example, maybe they should absorb the costs or Ford. I know we've heard that from White House officials before, but you're looking at everyday people who run their businesses. They can't even afford round one, let alone three, four months of this.

NIA-MALIKA HENDERSON, BLOOMBERG POLITICAL & POLICY COLUMNIST: Yeah. Listen, if you engage in the economy in any way, you are hearing about tariffs, you're hearing about higher prices. If you want to get your garage door repaired, as I tried to do a couple of days ago, you're hearing prices that are reflecting higher prices in the tariffs at this point.

So, this idea that this is yet to come, Americans are already experiencing it. You go to Walmart, their prices are a little lower. You try to buy something on Amazon. For a time, you could go and be like, oh, this is really cheap, and you would buy a lot of things, as I have done. And now --

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BASH: I've never done it.

HENDERSON: Yeah. It's a little bit more expensive at this point. Maybe it's only 15 percent, 20 percent, but average Americans can tell that this is already having an effect.

BASH: And Yale budget lab, John Bresnahan says the impact of Trump's tariffs on tariffs on average household income will be about a $2,400 loss. Now the treasury secretary --

JOHN BRESNAHAN, CO-FOUNDER, PUNCHBOWL NEWS: So, it's like $200 a month. That's a huge --

BASH: Yeah. And the treasury secretary as his line, which you repeated this morning is, well, it's a bunch of Biden economists there. It's not just Biden economists.

BRESNAHAN: No. And I think -- listen, John King's point the, you know, and Richard Quest's point, you know, this is -- we move past the experiment point, the companies and business leaders are going to have to make a decision now. This is in place now. How long can I shift manufacturing lines to United States or other countries going to retaliate if I try to export out of the United States because I've shifted my manufacturing tonight.

Like, this is the global economy is so hyper complex that the fallout from this is going to take years to do it, but they can -- you know, Congress is not going to do anything. That's clear. If they're waiting for the Republicans in Congress to do anything --

BASH: What if the courts tell the Congress to do something?

BRESNAHAN: Well, we'll see -- we'll see the Republicans are not -- they're not going to go Buck-Trump at all. And so, they, you know, these countries, these foreign leaders are going to have to deal with Trump. And Trump is unpredictable. You know, look at what happened with India. They thought they had a deal with the United States, and they didn't. And then Trump does a deal with Pakistan instead. You know, South Korea, they're not sure where they stand with Trump.

So, this is, you know, just hyper complex stuff. It's mixed with other U.S. great power diplomacy, which is the other part of this. He's doing this, you know, he's using this to pressure other countries, using tariffs to pressure them in other ways. On Ukraine war, for instance, he's pressuring Russia. So that, you know, it's so hard to see what the path is here, and business wants certainty, and this is not what they're going to get from --

KING: And quickly to that point when things are hyper complicated. You look, how to -- how can you simplify it? I'll simplify it this way. Donald Trump won the election because he said he would lower costs. He told Americans Joe Biden was responsible for those higher prices. I will lower them. 15 months from now, Republicans are trying to defend their congressional majorities and that will be the question. So how this plays out between now and then has enormous consequences.

BASH: Great. That's the short term. Obviously, his goal in the long term, he says, one of the many, including the fact that he just wants fairness, is to bring all this manufacturing back to the United States. And is that possible, maybe, but it certainly takes a whole lot of time. KING: And let's hope that works and set politics aside. As American citizens, more factories in America. I've been doing this for 40 years, and I go back to these towns where there used to be factories, or dad worked there, grandpa worked there, but the kids can't work there, amen. If there's an American manufacturing renaissance, that should not be political.

However, when you travel to these places where you do have manufacturing, some people are skeptical of work, but they certainly think this is a 10, 15, 20-year process if it's going to work. You know, Tim Cook -- Tim Cook's in the oval office yesterday saying, Apple is going to invest more. That doesn't mean there's a factory in California or Pennsylvania or Ohio tomorrow. That means maybe five years from now, they're breaking ground on something.

HOLMES: We also know that some of these companies actually cannot, at this point, afford to manufacture in the United States. And they wouldn't be able to build and start something completely from scratch and have it done and the timeline that Donald Trump would want them too. So, this idea that you can just start manufacturing in the United States, you know, you talk about going to these places that have all these rundown factories.

It's not as though we can just move right back in and start the process up. It's as though we would have to start from scratch, given the fact that there are complete inventories and lines of product and distribution that have been set up now for years that would have to be reinstituted and restructured to do this. And that's not necessarily possible for some of these countries. It's certainly not possible to do in a year.

HENDERSON: Right. And you have to pay a living wage and more than a living wage and healthcare and benefits and regulations and all of that. I mean, there's a reason why these countries -- these companies are offshore --

BASH: I don't know, environmental standards are maybe not a problem -- administration anymore.

(CROSSTALK)

BASH: Up next. The pressure is on. Vice President J.D. Vance is in the Hoosier State with a message to Indiana Republicans, redo your maps. Help give the party majority an advantage. The latest on the redistricting wars, that's coming up.

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BASH: Vice President J.D. Vance is in Indianapolis today. He just wrapped up a meeting with Republican Governor Mike Braun and top state Republican officials. He was expected to push them to join the redistricting wars by redrawing their map to eliminate at least one Democratic leaning seat.

Now the deep red state's congressional delegation currently includes seven Republicans and only two Democrats. So far, Braun, the governor, has refused to commit, saying Indiana's current map looks fairly reasonable. Before the meeting he had with Vance, he sounded at least willing, though, to consider the idea.

(BEGIN VIDEO CLIP)

GOV. MIKE BRAUN (R-IN): I'm going to be listening to J.D. today and our two leaders of the legislature as well, and we're going to have that discussion. Here I think we're going to look at it logically, do what makes sense.

(END VIDEO CLIP)

BASH: Now after the meeting which just wrapped up, Braun called the conversation, quote, pretty good, but did not commit to anything. Our smart reporters are back at the table. Kristen, this is just one of so many examples of how the Trump White House, the political arm and the Trump Republican Party is just so brazen in their attempt. There's no hiding it there. This is what we're doing. This is what we're attempting to do, which is, as now, we've been talking about for a couple of weeks, break the system.

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HOLMES: Yeah. I would certainly call this a James Blair special. He's the deputy chief of staff. He runs political. He's legislative affairs. I mean, now they all do everything right, but this idea of working smarter, not harder. What can we do to make it easier for us to win, which isn't necessarily going to be going door to door? How can we change the system?

And we saw them do this in various ways during the 2024 election. You're going to see them do it again before the midterms. It's not just going to be this redistricting. Now, of course, the question is whether or not these Republicans actually go along with it, or if they think it's too much of a hassle and they can't actually get it done.

I mean, one of the things you talk about how Braun has kept his powder dry. So have the heads of the legislature there. They've been asked repeatedly, are you going to call a special session? They will not commit to a special session even to call it to consider the idea. There is a belief among Republicans that this is too much work and that this will cause hardships for them in the future. So, whether or not they can actually get them to do that is going to be a big question.

BASH: Yeah. I mean, there's so many layers of questions and traps in doing this for the future. I mean, Brez, I don't even want to count how many years you and I covered these lawmakers.

BRESNAHAN: Go back to Tom DeLay --

BASH: Yeah, and Tom DeLay. That's exactly what I was -- where I was going with this, which is that, you know, I guess, because this has been going on for a couple of weeks, people are, you know, read in on the fact that redistricting, of course, is supposed to happen after the census. And this is unusual because they're pushing this politically for one reason and one reason only to try to widen the gap that they need to hold the House through redistricting in the middle of the decade, which is not happened since Tom DeLay tried it way back when.

BRESNAHAN: It happened in certain states. I mean, certain states have done it. North Carolina did last cycle, but certain -- not nationally --

BASH: Not a mess, right, exactly. Let's just look more closely at Indiana, where J.D. Vance is right now. And just to say again, we're talking about only two Democratic seats there to begin with. Now it's a red state, so that's not very surprising. But what they're talking about is trying to at least get one more of those democratic states to -- they're going to read -- to redraw it to lean Republican.

BRESNAHAN: Yeah. They're talking about -- it's Frank Murray's district in the Northwest Indiana. He would be in big trouble here. But think about this. They're sending the message here. And Trump, by the way, calls for a new census today. OK. And now they're not going to -- the Trump administration is not going to say undocumented immigrants in a district count toward the census.

They're going to fight this, where that's going to end up in court. It's also billions of dollars and takes forever. But, you know, that's clearly their goal here. When you're talking, they are pulling out all the stuffs here to save, you know, that prevent Democrats from trying to win the House.

Now, if they do this in Missouri, there was talk about South Carolina. I don't think that'll happen because there would be Jim Clyburn, he's the only Democrat that could get there. But if they could pick up a seat here or there with five in Texas, that's what they're going for. They're playing for --

(CROSSTALK)

HOLMES: We're looking at this and we're saying two seats. I mean, and it could only be one seat that they pick up in Indiana, that they want a seat --

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BRESNAHAN: And there's the Alabama -- the Alabama seat in court. The Alabama minority majority --

BASH: Let's bring up Missouri and Ohio, just as two other examples. You're right. Of Missouri is another one, only two Democratic that leaning districts. They're going to try to take -- perhaps they're talking about taking at least one of those. And then in J.D. Vance's home state of Ohio, we're talking about 1, 2, 3, 4, 5 Democratic leaning seats, and they're talking about trying to at least pull some of those over. KING: So, let's say, hypothetically, you get your five out of Texas for Republicans, and you get a few more there. Let's say they get up to 10, right, maybe 12. That helps. Sure, that helps. It's raw politics, but it helps. So, then Governor Newsom in California says, fine. You want to play this game, I'll take five back, right? The Democrats will do four or five out of California. Maybe there'll be a couple other blue states that find a way.

The New York governor is talking about it, but she has way too many constitutional and, you know, it's too hard to do by next year. So, let's say there's a net gain, hypothetically, 5 to 10 Republican seats. Is that enough? So why is this happening? Donald Trump remembers 2018. They lost 40 seats. 40 seats. The current House Republican majority is one hand, right? Is one hand.

And so, you lose three or four seats, the other guys are in power right now. So, they're trying to stretch how many can we afford to lose, by doing this. Now this is the micro and the macro. I get it. I get the politics of it, whether you like it or don't like it, watching at home. That's what it's about.

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Donald Trump remembers Nancy Pelosi becoming speaker and his world changing. Him being impeached twice. He does not want to go back into that world, so he's trying to maximize his advantage. Can they get enough? That depends on the tariff conversation we just had, that depends on the economy, that depends on Trump's approval rating.

If there's a blue wave next year, and you're talking 25, 30, 40, seats, there's nothing they can do in this redistricting to help them. If it's a pretty even district by district fight next year, sure, adding five, six or eight seats, it helps.

BASH: And when I -- when I used the term rig before, I just want to note, and this is really important that gerrymandering is done by both parties, and it has been done by both parties for a very long time, which is why the partisanship is the way it is in the United States Congress.

Right now, the Democrats are at a disadvantage because they just don't run as many states as Republicans do nationwide. And then, if you look even more, you mentioned New York and that the governor there is limited in what she can do. There are only -- there you go, five -- five states that are run by Democrats who even have the potential to -- excuse me, four states have the potential to play the two -- play this game.

KING: But again -- so, let's say they couldn't do all 15. Let's say they did 10, right? That almost negates what the Republicans can do. So, part of -- and the one another risk for Republicans here is they're firing up the Democratic base about this and midterm elections are about base intensity. So, if Republicans are still mad about Jeffrey Epstein and working-class Trump voters, don't really care about congressional races anyway. Have their costs go up because of tariffs, and they stay home, and the Democrats are like all in because it's Trump anyway.

Plus, this fight -- there's -- this is -- you use the word hyper complicated about tariffs. This is hyper complicated.

HENDERSON: It speaks to the lack of confidence that Donald Trump has in his record so far, the big, beautiful bill is underwater in terms of its approval rating, 60 percent or something of Americans disapprove of it. The tariffs are already here in so many ways. Americans haven't had any relief in terms of lowering prices, which is what he ran on, which is what he won on.

And so now they do have to rig the system. They do have to essentially cheat and rearrange some things in these states like Texas, which I imagine Indiana. All of these states where there are Republicans who are sort of MAGA types, and you see Donald Trump, obviously with absolute control over the Republican Party.

I imagine they will end up folding. I imagine they'll find a way to do it, even if it's difficult, but it will ignite something else on the other side. You already hear Gavin Newsom talking about this, and you imagine that other Democrats in states, as you know, to the extent that they can, will try to do the same thing.

BASH: The congressional district system has been rigged for a long time. The difference now is that they're doing it right in the middle of the decade, which we haven't seen again in a very long time. Don't go anywhere. Donald Trump wants a new census. You just heard Brez talking about that. It's a big change to how the country counts people. What it means is so important. That's next.

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