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Quest Means Business
Trump Nominates National Security Adviser Mike Waltz to Be U.S. Ambassador to U.N.; U.S. Chamber of Commerce Ask White House for Tariff Relief; Zelenskyy: Minerals Deal is First Result of Trump Meeting; Tesla Denies Report of Board Seeking to Replace Elon Musk; Trump Asks Supreme Court to End Deportation Protections for Venezuelans in the U.S.; Tariffs Force Japanese Auto Factory to Revamp Operations; Apple, Amazon Announce Earnings. Aired 4-5p ET
Aired May 01, 2025 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:08 ]
JIM SCIUTTO, CNN HOST: Strong earnings from Microsoft and Meta helped bring the markets up a little bit today. The Dow finishing up slightly. Those are
the markets and these are the main events.
President Trump is seeking to move Mike Waltz from National Security adviser to U.N. Ambassador, after you remember, Waltz was embroiled in the
Signal chat scandal.
Ukraine and the U.S. sign a minerals deal heavy on symbolism, light on details.
And automakers on both sides of the Pacific brace for the costly impact of tariffs.
Live from Washington. It is Thursday, May 1st. I'm Jim Sciutto in for Richard Quest and this is QUEST MEANS BUSINESS.
Good evening to you. Tonight, the Trump administration has announced its first major staffing shakeup. President Trump says he is nominating
national security adviser Mike Wallace to be U.S. Ambassador to the United Nations. Waltz had been at the center of a scandal for mistakenly adding a
journalist to a Signal group chat used to discuss upcoming battle plans.
Secretary of State Marco Rubio will be the interim National Security adviser, a move that caught the State Department spokesperson by surprise.
(BEGIN VIDEO CLIP)
REPORTER: That in the interim, Secretary of State Marco Rubio, will serve as National Security adviser while continuing his strong leadership at the
State Department.
Do you know how long he is going to be serving in both roles?
TAMMY BRUCE, STATE DEPARTMENT SPOKESPERSON: It is clear that I just heard this from you. I had I -- this is -- the magic --
REPORTER: No heads up at this point?
BRUCE: Well, I have some insights as to the potential of certain things that might happen.
(END VIDEO CLIP)
SCIUTTO: Surprised at the State Department podium. Kevin Liptak is at the White House. So is this a demotion for the National Security adviser?
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes, there is no question. You know, the U.N. Ambassador job, it is a cushy job in a lot of ways. $15
million penthouse apartment in New York, not all that bad for Mike Waltz. But when you're thinking about the Trump administration, I can't think of a
place where the President is thinking about less than the United Nations. He doesn't view that body as particularly effective when it comes to
foreign policy.
And so I think when you're moving out of a corner office in the West Wing and moving to an entirely different city, you're not going to have as much
influence with the President, who is someone, in a lot of ways where proximity is where your power is derived from.
And so I think this is no question, a demotion. The President had lost confidence in Mike Waltz. He had actually lost confidence in him quite a
while ago, beginning with that Signal gate episode. The President thought about firing him after that, but he had really hoped to avoid the
impression of chaos that had really colored so much of his first administration. Remember, he went through four National Security advisers
the first time around.
And so now, on the 102nd day of his administration, I think it was clear that the President thought that now was the time, essentially, that enough
time had passed and now he believes that Mike Waltz just could no longer effectively serve in that job.
It had been clear that his influence was waning in the West Wing for quite some time and I think back to that episode involving Laura Loomer, the
conspiracy theorist who found a way into the Oval Office to inform the President that staffers on the National Security Council were disloyal to
him, and the President fired them, essentially neutering Waltz's ability to determine his own staff.
I think after that, it was evident both from the outside, but more critically inside the National Security Council and inside the West Wing
that Waltz just did not have a lot of sway with the President and now today, the President determining that he will send him up to New York to
become the Ambassador to the United Nations, if he is confirmed, because that's the other part of this that this now sets up, which is a potentially
contentious confirmation hearing.
There is no question that Democrats are going to ask Waltz about the Signal episode and about the potential culpability for all of the other officials
who were involved in that, most principally the Defense Secretary, Pete Hegseth.
And so, in a lot of ways, this just revives the Signal controversy that the President had been so eager to move past, but clearly a significant
shakeup, the first significant shakeup of this new Trump administration.
SCIUTTO: Kevin, he of course, Waltz is not the only one involved in that Signal chat, though he added the journalist, lots of questions about the
Defense Secretary, who shared quite sensitive intelligence about upcoming military operations against Houthi rebels on that chat. Is there any sense
of where he stands now? Pete Hegseth?
[16:05:03]
LIPTAK: Yes, he did it on that chat and he did it on an entirely separate chat with his wife and brother on it. And so, you know, the details, I
think, for Pete Hegseth are all fairly damning, but it is pretty obvious that the President is sticking by him.
And I think back to an episode just this week, the President was traveling to Michigan, and I was on the plane with him. Mike Waltz actually flew to
Joint Base Andrews on Marine One with the President. He got up and walked towards the plane, but he didn't get on Air Force One. Essentially, he was
left behind on the tarmac.
Pete Hegseth was on the plane and did travel with the President and does seem to retain the confidence, in part because the President expended so
much political capital getting him confirmed in the first place. I don't think that there is any appetite on the part of the President or his top
advisers to go through one another, confirmation process or two, to admit that that was all for nothing, to fire him and essentially say that that
was a waste of their time.
And so the President for now, very much sticking with Pete Hegseth, who, you know, behind-the-scenes, the President does think he is doing a good
job. He thinks he looks good on T.V. He likes sort of this attitude that he brings to The Pentagon. Certainly, a feisty attitude when it comes to the
press, when it comes to Democrats, this kind of idea of building up The Pentagon as a warfighting agency, the President is fully on board with
that.
And so for now, Pete Hegseth very much seems secure in his post.
SCIUTTO: Yes, performance on television always seems to be an important metric.
Kevin Liptak, thanks so much.
The U.S. Chamber of Commerce says small businesses cannot wait for the White House to make trade deals. It is pleading for a tariff exclusion
process.
U.S. Chamber CEO, Suzanne Clark wrote to Trump Trade officials: "We are deeply concerned that even if it only takes weeks or months to reach
agreements, many small businesses will suffer irreparable harm." More major corporations are also warning of pain. McDonald's, which serves as a
barometer of the U.S. consumer, says its sales are dropping. The fast food chain says its customers are grappling with the tariff uncertainty, price
uncertainty as well.
Vanessa Yurkevich is in New York. She has been covering this. That's a stark warning from the U.S. Chamber of Commerce, because they are clearly
talking to a lot of small American businesses who are saying to them, this is hurting us, ad that word, "irreparable" damage, that stuck out to me.
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, it is strong language and they are really feeling the heat from all of the small
businesses that they represent and that they've been speaking to and essentially, this letter went out to the administration, to the top trade
negotiators, the Treasury Secretary, the Commerce Secretary, and the U.S. trade representative.
And the letter starts by saying that they support the President's efforts to reduce trade barriers, but then it goes on to say, from the President of
the U.S. Chamber of Commerce, Suzanne Clark. And I am just going to read you a small snippet that they have heard from a historic number of small
businesses who have made it clear they need immediate relief from tariffs. As each day goes by, small businesses are increasingly endangered by higher
costs and interrupted supply chains that will cause irreparable harm. There is that word again there.
So essentially, the U.S. Chamber of Commerce held this call with small businesses to try to give them advice about how to negotiate or, excuse me,
navigate these times. Over 3,000 small businesses showed up to this call, so they were hearing a lot from them, just about the harm that this was
causing.
And so now you have the Chamber asking for sort of three action items from the administration. One is to exempt small businesses from these tariffs,
two to exempt products that cannot be produced domestically, like coffee, things like bananas, cocoa and certain minerals to be exempt. And they also
want the administration to set up an exemption process whereby businesses can sort of fill out a form saying that if they are suffering job losses
because of tariffs, that they would be exempt.
Now, also in this letter, the president there of the U.S. Chamber of Commerce goes on to say that if the administration does not take immediate
action, essentially they're looking to that they would cause a recession. This language says that in order to save America's small businesses and
stave off a recession, the administration needs to take immediate action on this.
So there is like -- there is pretty strong language in here and it is worth noting that they are not just saying this on behalf of themselves. They are
saying this on behalf of thousands of small businesses that they have actually heard from -- Jim.
SCIUTTO: So this McDonald's number is interesting. Sales dropping three percent, but the thing is they are not alone. Chipotle, Dominos, Starbucks,
Pizza Hut, KFC all reporting slower sales, which seem to mean consumers aren't spending enough and that's a big deal.
YURKEVICH: Yes, and this is the second quarter in a row that McDonald's is reporting slower sales. So a drop by 3.6 percent this quarter and that
really signals, according to the CEO, that consumer sentiment is not good. And you have then consumers pulling back on spending.
[16:10:10]
And the reason why sort of McDonald's is a bellwether in the food industry, like Walmart, is a bellwether in the retail industry, is because these are
supposed to be affordable places that people can spend money on goods and services at Walmart, but at McDonald's, on food. And if you have people
pulling back on spending in those types of places, then it is significant for what is to come for the rest of the economy.
And as you mentioned, this is not just McDonald's, it is Chipotle, it is Starbucks, its Dominos all reporting weaker earnings and all citing the
same exact thing, which is economic uncertainty.
And so McDonald's out with this report saying that they are just facing different consumer behaviors than they are used to and it is because of the
tariffs.
SCIUTTO: Vanessa Yurkevich, thanks so much.
Well, President Trump himself acknowledged on Wednesday that tariffs may lead to higher prices. He nonetheless downplayed the issue and said
consumers were just, in effect, have to buy less stuff.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: Maybe the children will have two dolls instead of 30 dolls, you know, and maybe the
two dolls will cost a couple of bucks more than they would normally. But we are not talking about something that we have to go out of our way.
(END VIDEO CLIP)
SCIUTTO: Notable, that was not in his campaign. It echoes what the Treasury Secretary, Scott Bessent told the Economic Club in New York in March. He
said: "Access to cheap goods is not the essence of the American Dream." All this, despite you'll remember, Trump campaigned very much on lower prices.
Robert J. Gordon is a Professor at Northwestern University. He is the author of "The Rise and Fall of American Growth," which explores living
standards in the U.S. going back to the Civil War.
Thanks so much, Professor Gordon, for joining us.
ROBERT J. GORDON, PROFESSOR AT NORTHWESTERN UNIVERSITY, "THE RISE AND FALL OF AMERICAN GROWTH" AUTHOR: Glad to be here.
SCIUTTO: So when you look at the indicators and you've looked at the history of where those indicators tend to lead, you've got fast food
companies saying we are selling less, you have small businesses telling the U.S. Chamber of Commerce they are being hurt, perhaps irreparably.
You had an economic contraction in the first quarter. You have basically shipping about to drop off a cliff in the coming weeks. What does that
point to from your perspective?
GORDON: Well, let me tell you that President Trump says that our trade deficit is a sign that we are losers, but actually, it is a sign of our
enormous success, and here is the logic. For every dollar that we spend going out, some other dollar has to come in. The accounts have to balance.
And the dollars that come in come in two different ways. One is the strength of the dollar. The dollar is the world's reserve currency. So a
lot of those dollars coming in, foreign countries holding their reserves in dollars.
But the real sign of our success is that those foreigners are attracted by our stock market. Our stock market is worth double our GDP. In Europe, the
stock market is only worth 50 percent of GDP. So this money flows in as a result of the fact of the tremendous success of the U.S. economy in
inventing the three biggest inventions of the last 50 years, personal computer software, search engines -- make it four things -- e-commerce and
the smartphone.
Those four inventions are totally dominated by American companies. Those are part of the Magnificent Seven that makes our stock market so valuable
and attracts money from abroad.
To stop having a trade deficit, from that standpoint, we would have to kill our stock market, which was partly evident in early April, and we would
have to have a collapsing dollar, which would reduce American standard of living. So that's just one way of looking at it.
SCIUTTO: Trump's goal, as he describes it, as Howard Lutnick describes it, is to bring manufacturing back here, all sorts of manufacturing, not just
at the high end, but, you know, putting the screws in the backs of your iPhones, et cetera. Is that possible in today's global economy? And would
it make things more expensive?
GORDON: Well, of course it will make things more expensive. But let me just give you a simple example. We now have 13 million manufacturing workers,
which is about eight percent of total employment. Let's say that by some miracle, all of this raises manufacturing employment by one million.
Okay, now these -- we have a four percent unemployment rate. These people are now unemployed. The effect would be certain people would get jobs in
manufacturing instead of having jobs maybe at McDonald's. Let's say each of those people getting a manufacturing job makes $20,000.00 more than they
are now making.
Okay, that's $30 billion or $40 billion a year. Compare that with the effect of 20 percent tariffs.
[16:15:02]
Imports are $4 trillion, 20 percent of that is $800 billion. The hurt to consumers from all of this is something like 15 to 20 times any conceivable
benefit in raised wages for those few people who will get manufacturing jobs. It is just too small to matter compared to the enormity of the
American consumer market.
SCIUTTO: This is the President of the United States who is I don't think it is an exaggeration to say obsessed with trade deficits, as in his view,
being fundamentally theft, right? That the U.S. is losing those deals. In the simplest terms, based on the data, does President Trump not understand
economics?
GORDON: Absolutely not. He does not understand it. And I will tell you another way of thinking about it, besides all the successful companies and
the foreigners wanting to invest in our stock market. Another thing that we teach in basic economics is that our trade deficit, by definition, has to
equal the difference between our national savings, that's how much private people save and how much the government saves and our total investment.
So we save less than we invest, so we have a trade deficit by definition. Now, what would it take for us to save more? Well, private people could
save more, but the real change would be if the government stops running a deficit.
So the biggest thing that Trump could do to avoid having a trade deficit would be to kill this tax cut, raise taxes instead of cutting taxes. There
is no faster way to reduce the trade deficit than to reduce the government deficit.
Those so-called twin deficits go together, like Tweedle Dum and Tweedle Dee and Trump by trying to cut taxes, is just going to make the trade deficit
worse, not better.
SCIUTTO: Professor Robert J. Gordon, thanks so much for the economics lesson.
GORDON: Delighted to be here.
SCIUTTO: Coming up, the U.S. and Ukraine sign a long awaited minerals deal. It comes after months of sometimes difficult negotiations. What does it
mean exactly?
(COMMERCIAL BREAK)
SCIUTTO: Ukrainian President Volodymyr Zelenskyy says a meeting with Donald Trump at the Vatican at the Pope's funeral resulted in that signing of a
long awaited minerals deal.
Zelenskyy met his American counterpart right before Pope Francis' funeral. There is that picture. President Zelenskyy says he is looking forward to
other results from that conversation.
[16:20:05 ]
The final minerals agreement is more favorable to Ukraine than previous versions the U.S. had presented. Still, extracting critical minerals will
require considerable investment as Nick Paton Walsh discovered when he visited a Ukrainian mining facility.
(BEGIN VIDEO CLIP)
NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: Now, all the talk of Ukraine's rare earth minerals and metals comes down to a place
like this, a critical metal titanium you can see down here, the scrape of the earth, huge machines required to do this, and they run on electricity.
The owner here saying that because of Russian bombing of the electricity grid, sometimes they only get three hours a day in which they can work.
(END VIDEO CLIP)
SCIUTTO: And Nick Paton Walsh is live in London.
I wonder, Nick, as you visited those facilities given -- listen, there is a war going on around them. Russia has taken care to strike Ukrainian
infrastructure. Did it look to you like an industry that needed significant investment and time?
WALSH: There is no doubt that there are vast parts of both the rare earth minerals, the critical minerals, the natural resources of Ukraine that
after the damage of this war and frankly, neglect of the Soviet and post- Soviet era, need huge amounts of money to start getting near producing the kind of revenues that is going to make a difference to the Trump White
House.
And that gives you, I think, a window, Jim, as to the symbolic nature, really, of what we've seen.
Yes, this agreement does have teeth. It sets up a fund that could potentially, at some point, bring a lot of money to U.S. coffers. But it
isn't tomorrow, it isn't next month or next week potentially and it is going to essentially lay open a longer term framework for a relationship
between two countries who within three years will most likely have different administrations running them or be in electoral cycles of their
own.
So a lot to still be decided potentially about its implementation, but if this deal had not been signed and you're right, Jim, you know, it is a
better version than a very corporate agreement that we saw about a month ago now that was put down, it seemed, by Delaware lawyers. It is more
friendly towards Ukraine than that. If that signing hadn't occurred, I think there would have been really a seismic rupture between Washington and
Kyiv.
Instead, we have this deal, which needs to be ratified by Parliament still, but is sellable by Ukraine as a success. There are two key parts of that
deal that they, I think I am sure are particularly pleased with. One is the White House signing on to this concept full-throatedly that Russia launched
an invasion of Ukraine and caused large scale devastation. That's not mincing of words or ambiguity there.
You know, we heard some of that from Trump officials when dealing, often very gingerly with who started this particular war. Indeed, at times
getting it entirely wrong and there is a second part of this as well, which lays out a mechanism for future Ukrainian arms purchases from the United
States. This fund can be used to pay the U.S. for that.
Now, the Trump administration hasn't been clear if they want to give more arms after the Biden grants run out later on this year, but here we have a
mechanism. I am sure many in the Kremlin will take note of that, take note of how this is a sign of, again, the pendulum on which Donald Trump seems
to sit as he tries to navigate a way towards a peace deal here, but it is swinging back towards Ukraine and Ukraine's European allies, particularly
after that Vatican meeting and Donald Trump is presuming circulation around so many world leaders there that are pro-Ukraine, and I am sure Russia
increasingly under pressure for not accepting a ceasefire proposed by the U.S. and Ukraine, will potentially begin to see an erosion in their comfort
levels about how much patience President Trump has for them.
SCIUTTO: Nick Paton Walsh in London, thanks so much.
Well, as we were discussing there, Ukraine faces some major roadblocks in building profitable mining operations. Significant resources are located in
territory Russia has captured and controls, including the bulk of Ukraine's coal deposits. Ukraine has had to close mining facilities due to Russian
military advances.
Businesses would also have to navigate an inefficient and complex regulatory process in Ukraine, not to mention there is a war still
underway.
Yuriy Vitrenko is the former CEO of Ukrainian energy company, Naftogaz, and he joins me now. Thanks so much for taking the time.
YURIY VITRENKO, FORMER CEO OF NAFTOGAZ: Jim, hello.
SCIUTTO: So first big picture question, because earlier versions of this deal were seen by some in Ukraine, some in Europe as exploitative of
Ukraine. I wonder when you look at the current version, is it a win-win in your view, for Ukraine and the U.S.?
VITRENKO: It has a potential to be a win-win. Still, again, there is -- there are some risks and it is more like a framework agreement, so a more
detailed practical technical agreement should follow. And it remains to be seen what will be there. But at least again, it has a lot of potential to
be a win-win.
[16:25:10]
SCIUTTO: When we look at the oil and gas part of this, right, because initially the focus had been very much on rare earths, and that is still
part of this, but oil and gas are now included. What is the significance of that in your view?
VITRENKO: Yes. Now, it is about natural resources that again, including oil and gas, including critical minerals and rare earth minerals. Rare earths
is probably more like a future, I would even say a more distant future because even though again, some estimates says that we have like $15
trillion worth of rare earth minerals in Ukraine, but nobody knows how much you need to spend to be able to extract these rare earth minerals.
And you need a lot of investments, a lot of time. What is the most important thing, you need new technologies, otherwise it won't be
economically efficient. And oil and gas, it is not like a future, not even like distant future. It is really what we are extracting now and what is
very profitable at the moment.
There are investors inside Ukraine and foreign investors I know from my own experience that are ready to invest in oil and gas production in Ukraine
even during the war.
And also again, in terms of like territories that are currently occupied by Russia, it is more about coal and some minerals, but less about oil and
gas. So from that perspective, also we have a lot to offer right now.
SCIUTTO: The obvious fact is that Ukraine is still the target of a large scale Russian invasion. It is a deadly war that is still underway in the
east, and Russia continues to bomb Ukrainian infrastructure and cities.
Can any of this begin before the war ends?
VITRENKO: Yes, of course. Again many projects, especially capital intensive projects, should be delayed after the war. And by the way, we hope that
with this deal, because that's what Trump wanted and he got it, so we would expect new weapons. We would expect some additional economic sanctions on
Russia, like, for example, Lindsey Graham's proposal that is bipartisanly supported in the U.S., if it all happens, it increases the chance that
Putin will agree to armistice and that brings the peace that we all want to have. It will also open the way for investments.
But even during the war, again, there are investments that can be made. It should be made. Also, there are some reforms that at least should be
prepared because this agreement is very clear about the need for transformation of Ukraine and that Ukraine should be much more open in
terms of like market reforms. There should be structural reforms, the rule of law should dominate and that's something that we should be working on
right now and the U.S. can help and at least I would expect it.
SCIUTTO: There was a horrible meeting, as you remember, two months ago in the White House, a little over two months ago, this deal signed just over
two months after that Oval Office meeting between Zelenskyy and Trump, which was a troubling time not just for Ukrainian President, but the
Ukrainian people.
I remember speaking to other citizens of your country who were just alarmed and saddened by it and worried about the status of the relationship with
the U.S.
I wonder, do you see this deal as showing that the relationship is repaired?
VITRENKO: Frankly, I don't think so, so we still have a lot of frustration, I would say or sometimes just people are puzzled, I would say because
again, if you look at the U.S. foreign policy at the moment, maybe again, it is just because they want to negotiate with both sides. But of course,
many people feel like it is not the level of support that strategic partners should have and the level of trust that strategic partners should
have. And we are on the yes side. We are on the side of the free world and we would expect some reciprocity.
So frankly, again, currently there is some damage that still needs to be repaired.
SCIUTTO: Yuriy Vitrenko, former CEO of Naftogaz, we do appreciate you joining.
VITRENKO: Thank you.
SCIUTTO: Well, Tesla is denying reports it is considering a replacement at CEO for Elon Musk. We are going to speak to Emily Glazer, one of the
reporters from "The Wall Street Journal" who broke the story about that new executive search, that's coming up.
(COMMERCIAL BREAK)
[16:32:56]
SCIUTTO: Hello, I'm Jim Sciutto. There's more QUEST MEANS BUSINESS in just a moment when I'll be speaking to a "Wall Street Journal" reporter who's
reporting Tesla's board considered replacing Elon Musk. And major tech earnings just released. We'll break down the numbers from Apple and Amazon.
Before that, though, the headlines this hour.
Major shakeup at the White House. President Trump is removing his National Security adviser, Mike Waltz, tapping him to instead be U.S. ambassador to
the U.N. Secretary of State Marco Rubio will, for now, be doing double duty, taking over the National Security adviser role while keeping his
current post.
The U.S. and Ukraine have finally reached a deal on minerals and mining. The agreement gives Washington preferential access to Ukraine's rare earth
minerals and future U.S. military aid to Ukraine will count as investment in the country's reconstruction.
The nominations are out for the 78th Annual Tony Awards. The musicals "Buena Vista Social Club," "Maybe Happy Ending" and "Death Becomes Her" all
received 10 nominations. Broadway veterans Megan Hilty and Jonathan Groff both received acting nominations. George Clooney received his first
nomination. Cynthia Erivo will host the ceremony on June 8th.
The chair of Tesla's board is denying a report that the electric car maker is seeking a new CEO to replace Elon Musk. The "Wall Street Journal"
reported Tesla board members had reached out to several executive search firms to begin work on finding a successor. Tesla shares closed down
slightly. "The Journal" reported the search began this year, while Elon Musk was spending much of his time leading the Trump administration's DOGE
cost-cutting charge.
Tesla has faced a rocky year, to say the least, down about 25 percent from the start of the year. Its sales flagging as well.
[16:35:02]
Emily Glazer is one of the "Journal" reporters who broke the story. She joins me now.
So, Emily, first question is, is this search, according to your sources, still underway, or was this something they explored and then abandoned?
EMILY GLAZER, REPORTER, THE WALL STREET JOURNAL: Well, first, I want to start that we stand by our reporting. And our reporting shows that Tesla's
board reached out to several executive search firms to really kick start the process of finding Elon Musk's successor. We did not say they were
trying to replace him right away. And in fact, we note that because Elon Musk said during earnings last week that he would be recommitting and
spending more time at the company that put this whole process into a bit of an unclear territory.
We also reported that ahead of those earnings, those disastrous earnings, I believe profits fell about 70 percent, that the board gathered and told
Elon Musk that they needed him to spend more time at Tesla, and they needed him to say it publicly, and he did not push back. And after that, he did
make that commitment.
SCIUTTO: The thing with Tesla, when you speak to folks who follow the stock, is that there, well, two, actually really three issues going on.
It's not just the time with DOGE, it's his public profile, right, which has damaged the brand and therefore damaged sales. But you also at the same
time have significant sources of new competition. Those aren't going away, right? And perhaps not the brand damage.
So I wonder, as you've been speaking to sources about what motivated this potential change, was it just about the time in Washington or was it other
issues as well?
GLAZER: There were a couple of things at play. While Tesla's stock shot up after the election, Elon Musk spent more than $250 million supporting
Donald Trump's reelection efforts, it has since really shot down over time. Some people who own Teslas, there have been many reports about the bumper
stickers. There's been, like you said, some really weakening consumer demand and the overseas trouble as well.
Let's not also forget that Elon Musk has some contention over his pay package. And our reporting shows that last year, as the courts were going
back and forth over Elon Musk's multi-billion dollar pay package, he confided to someone personally that he did not really want to be CEO
anymore, and there wasn't anyone to replace him. He's made comments like that publicly in the past. You know, court testimony in years past.
But we know that he felt kind of burned, that he wasn't getting paid for his role and acknowledged to someone that there was no immediate successor.
So we are reporting that the board reached out to these executive recruitment firms to start the CEO succession planning process. It's this
formality. And I just want to emphasize, again, we stand by our reporting.
SCIUTTO: Emily Glazer, thanks so much for joining us.
GLAZER: Thanks for having me.
SCIUTTO: Well, President Trump is turning to the Supreme Court now for help with his immigration crackdown. The White House asked the high court today
to unwind deportation protections for hundreds of thousands of Venezuelan migrants. Earlier, a U.S. judge said the Trump administration cannot rely
on an 18th century law to deport suspected Venezuelan gang members.
The judge, who was actually appointed by President Trump, says the president unlawfully invoked what's known as the Alien Enemies Act, that
law's use is being challenged now actually in multiple courts. This is the first case to have reached a final decision.
Priscilla Alvarez is with me now.
First, let's begin with the Trump administration turning to the Supreme Court regarding a separate case. And this is temporary protected status for
Venezuelans. What's the root of the case here?
PRISCILLA ALVAREZ, CNN CORRESPONDENT: Yes, Jim. Temporary protected status is a form of humanitarian relief for those already in the United States.
Now, this lawsuit had stemmed from a decision by the Department of Homeland Security secretary to end protections for Venezuelans who have been granted
temporary protected status. They were granted that form of relief under former President Joe Biden.
Now, this program has often been a target by Republicans, including by Trump officials, because they have argued that a program that was supposed
to be temporary has often been extended time and time again. So now there was the lawsuit that occurred later. A federal judge blocking the
administration from ending these protections for some 300,000 people in the United States. And now the administration is asking the Supreme Court to
step in on this very matter.
Now, this -- I have talked to multiple Venezuelan migrants in the United States, and they tell me they don't have a country that they feel that they
can go back to, so they don't fully understand why the administration has come to the decision to end temporary protected status. But this lawsuit
also says what you just stated there, which is that the administration violated the procedures that they needed to take to come to this decision
to begin with, and have also said that the secretary's decision was motivated by racial and political bias.
[16:40:11]
So we'll see what the Supreme Court says here. But certainly this is a case that a lot of people, hundreds of thousands of people in the United States,
will be watching very closely.
SCIUTTO: All right. Let's go to this other case here. It's a federal judge in Texas who went further even than the Supreme Court had prior. The
Supreme Court ruled recently that these deportees did have the right to due process. This judge is saying that the Trump administration is misusing the
Alien Enemies Act. That's potentially more significant if it stands.
ALVAREZ: It is significant. It's going straight to the core of the matter, which is that the administration or the president in this matter, according
to this federal judge, exceeded his authority by relying on this law, which recall the Alien Enemies Act has only been used three times in U.S.
history, all during wartime. So the federal judge in this case is throwing cold water on the basis by which the administration has invoked this law.
Now, the administration has said that Tren de Aragua, the Venezuelan gang, is invading the United States. Well, this federal judge doesn't seem to buy
it, saying, quote, "Allowing the president to unilaterally define the conditions when he may invoke the AEA," standing for Alien Enemies Act,
"and then summarily declare that those conditions exist, would remove all limitations to the executive branch's authority under the AEA, and would
strip the courts of their traditional role of interpreting congressional statutes to determine whether a government official has exceeded the
statute's scope."
I mean, for context here, Jim, the last time that this law was invoked was during World War II, the administration, of course, trying to use it to
quickly deport Venezuelan migrants in the United States, who they alleged have ties to this gang known as Tren de Aragua. Now, as far as what this
means for the people who are subject to this authority, those who are within this federal judge's district in Texas would be barred from being
deported under this authority.
There are numerous legal challenges across the United States blocking the deportation of Venezuelan migrants, who the administration has determined
have ties to this gang, and they want to remove. Of course, we've also heard anecdotes and heard from attorneys who say that those at the
administration say are tied to this gang are not, and that has raised a lot of concern, which has sparked the lawsuits.
But now this is a significant ruling because it goes again straight to the core of the matter of the president exceeding his authority, of invoking it
at a time of peace, not war.
SCIUTTO: Priscilla Alvarez, thanks so much.
Well, automakers are beginning to feel the impact of Donald Trump's tariffs. We're going to hear from the CEO of General Motors about the $5
billion bytes they believe those tariffs will take out of their business.
(COMMERCIAL BREAK)
[16:46:02]
SCIUTTO: The CEO of General Motors says tariffs are expected to cost the company up to $5 billion this year. The White House did ease its auto
tariffs this week after speaking with carmakers such as GM. Chief executive Mary Barra told CNN earlier that she's grateful at least for those changes.
(BEGIN VIDEO CLIP)
MARY BARRA, CEO, GENERAL MOTORS: When we look at the overall $4 billion to $5 billion impact from tariffs that we shared, that is what we know now
based on the clarity that we're given. And we're very appreciative that the president provided that clarity. We actually delayed this conversation with
you and with our investors for a couple of days because we knew, we had been working with the administration for several months, working with the
president and many members of his administration.
So they understood our industry, the complexities of the supply chain, and the capital intensive nature of our business. And so when we understood
that that announcement was actually and the actions were going to become official on Tuesday, we thought it was better to wait and be able to
provide the guidance that we did.
As it relates to the $4 billion to $5 billion, there are many steps that we can take to offset. For instance, we've already added more than 50,000 on
an annualized basis trucks that will be building in Fort Wayne, Indiana. And there's other moves that we can make. We already have a very U.S.
centered supply base. Over 80 percent of the parts that go into our vehicles are already USMCA compliant, and the lion's share of that is U.S.
So there's many steps that we can take to offset the $4 billion to $5 billion. But we wanted to be transparent and share that's the impact right
now.
(END VIDEO CLIP)
SCIUTTO: Japanese automakers are bracing for tariffs themselves. The U.S. and Japan are holding more trade talks on Monday. Concern about tariffs
caused the Bank of Japan to slash its economic growth forecast for Japan.
CNN's Hanako Montgomery spoke to one local businessman who is having now to revamp his operations.
(BEGIN VIDEOTAPE)
HANAKO MONTGOMERY, CNN CORRESPONDENT (voice-over): For 40 years, Hiromutsu Hamaguchi has run his car parts factory, taking pride in supplying major
Japanese automakers with parts used by drivers around the world. But with Donald Trump back in the White House, Hamaguchi says he's forced to try
something new.
HIROMUTSU HAMAGUCHI, CEO, HAMAGUCHI URETHANE (through translator): Rescue boats are something we manufacture entirely in-house with our brand name so
we can sell them ourselves. Right now it makes up for about 5 percent of our total sales, but we'd like to double it to around 10 percent.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You got to see what's happening.
MONTGOMERY: In his 100 days back in the Oval Office, Trump has driven the U.S. economy to the brink of a crisis and waged a tariff war no country
wants. A new executive order signed Tuesday eased some auto tariffs, but that help doesn't trickle down to small suppliers like Hamaguchi, who are
struggling to stay afloat.
Now all the car parts being made here, like part of a car seat, headrest, are all going to be 25 percent more expensive thanks to the U.S. President
Donald Trump's new tariff on all auto imports. Now, that could be devastating for Japan's economy. About 3 percent of its GDP comes from the
auto manufacturing industry, and it also employs millions of people in Japan.
MAYU FUJIMORI, FACTORY WORKER, HAMAGUCHI URETHANE (through translator): If I lost this job, I'd have no choice but to look for another one. But I've
only ever worked in factories, so I'm a bit worried about whether I'd be able to do something different.
MONTGOMERY (voice-over): Trump has threatened auto tariffs since his first term, using them as leverage to cut deals with friends and foes alike.
TRUMP: And I said one thing you're going to have to open up your country because we sold no cars like zero cars in Japan, and they sold millions of
cars into our country.
MONTGOMERY: It's true that U.S. cars don't sell well in Japan, where only 0.3 percent of cars sold last year were American. But for very good reason.
UNIDENTIFIED MALE (through translator): American cars are large and have poor fuel efficiency, so fundamentally their vehicle size doesn't fit
Japan's road and traffic conditions.
[16:50:07]
Cars are too big, for example. In Japan, highly fuel efficient cars like hybrids are mainstream, and American manufacturers often don't offer hybrid
models.
MONTGOMERY: As Japan's top tariff negotiator is in Washington for another round of talks, suppliers like Hamaguchi say a deal can't come fast enough.
HAMAGUCHI (through translator): I want to say to Trump, please do it better. Don't be so intimidating.
MONTGOMERY: Hanako Montgomery, CNN, Shizuoka, Japan.
(END VIDEOTAPE)
SCIUTTO: Ultimately, you got to sell what they want to buy.
Coming up, Apple and Amazon have just reported their earnings. Both shares are lower in after-hours trade. We're going to discuss how the tech giants
are navigating those tariffs.
(COMMERCIAL BREAK)
SCIUTTO: In the last hour, the tech giants Apple and Amazon reported their quarterly results. Amazon slightly beat overall earnings. However, it
warned of, quote, "substantial uncertainty" in its guidance for the current period due in part due to tariffs. Apple also beat expectations, but growth
in its services revenue disappointed investors. Shares in both companies, as you can see, they're falling in after-hours trading.
Anna Stewart is in London.
So it seems like you look at these numbers here, they're saying things were good behind us, but going ahead not so good.
ANNA STEWART, CNN CORRESPONDENT: Jim, you always get these earnings reports. And yes, things generally look good when you just sort of read the
top lines and then you get into the nitty gritty detail and you start getting your calculator out and you start wondering what's actually behind
the numbers. And Apple is a great example. Beat on revenue expectations. If you look at sales that's where you see things slipping in some respects.
For instance, sales in greater China are down more than 2 percent. In the Americas, which is the category it gives, sales were actually up 8 percent
in this quarter. And that may be, as we've seen for other companies and other metrics, U.S. consumers rushing to buy iPhones or other Apple
products before tariff deadlines kick in. And this is really going to be where we're going to see a lot in the earnings call, I think. A lot of
interest in what will happen in terms of tariffs.
Interesting to note, services, which includes the App Store, iCloud, Apple Music, that is increasingly a bigger part of market share for Apple. iPhone
is slipping. I think it was 56 percent of their revenues last quarter. This quarter it's representing 49 percent.
[16:55:01]
People aren't upgrading their iPhones as much as they used to as well. But if everyone has rushed out to buy iPhones in the Americas in the last few
months, you wonder what sales might be for the next quarter.
So this is all very interesting. Tariffs are going to be a big subject for the earnings call. China, the tariffs on Chinese made products going into
the U.S. of course there is an exemption for smartphones. So it's no longer 145 percent. But how long will that last, and they still have a 20 percent
tariff. So one of the big questions for Apple is, where are they going to make the iPhones for the U.S. consumer? Can they shift all of that to
India?
Will they be able to make any in the United States without jacking up prices so high that U.S. consumers won't be able to afford them?
SCIUTTO: Yes. And listen, the idea of moving entire supply chains in the span of weeks and months or something, these companies say consistently,
you just can't do it.
Anna Stewart, I'm sure there'll be more to come. Thanks so much.
Let's take a final look at U.S. markets here. The Dow rose 83 points. Good for its eighth straight winning session. The S&P closed higher as well.
It's also on an eight day winning streak. Still lower than it was however before President Trump announced his reciprocal tariffs in early April.
Tech stocks started the month on a high note, the Nasdaq popping more than 1.5 percent. Microsoft and Meta, of course, the parent company of Facebook,
reported strong earnings after the bell yesterday. That gave a boost to the entire tech sector.
Crowds are gathering across the U.S. right now, with many anti-Trump protesters marking "May Day" on May 1st. Earlier, thousands marched in
Chicago. This stems from a movement which sprang out of a forum on Reddit called 50-50-1. The group -- sorry, that's Philadelphia. The group has held
numerous protesters in recent weeks. The family of deportee Kilmar Abrego Garcia appeared at the demonstration in Washington earlier as well.
We'll continue to follow those protests, and we'll also continue to, of course, follow these earnings reports coming in.
That is QUEST MEANS BUSINESS. I'm Jim Sciutto. "THE LEAD WITH JAKE TAPPER" is next.
(COMMERCIAL BREAK)
END
