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Trump Pauses Tariffs on Canada After Similar Delay for Mexico; State Department Takes Over USAID as Trump, Musk Talk of Scrapping It; CNN Investigates Trump's Claims About Panama Canal. Trump Pauses Tariffs On Canada After Similar Delay For Mexico; Plane Wreckage Recovery Begins As Officials Review New Findings. Aired 6-7p ET

Aired February 03, 2025 - 18:00   ET

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

[18:00:00]

PHIL MATTINGLY, CNN ANCHOR: Happening now, breaking news, President Trump is pausing punishing new tariffs on Canada just hours after agreeing to a similar delay for Mexico. Tonight, the Trump White House says both countries are, quoted, now bending the knee.

Also this hour, Secretary of State Marco Rubio says his department is taking control of USAID and reviewing its fate, the Trump administration making new moves toward potentially scrapping the world's largest foreign aid agency with Elon Musk leading the charge.

Plus, wreckage from the deadly D.C. plane and helicopter collision is now being removed from the Potomac River. The recovery operation underway as investigators pour over new clues about what may have gone wrong.

Welcome to our viewers in the United States and around the world. Wolf Blitzer is off today. I'm Phil Mattingly and you're in The Situation Room.

And we begin with that breaking news, Canada joining Mexico and getting a little preview from the hefty terrorist President Trump threatened to impose tonight. We have live reports from Canada and here in Washington.

First to CNN's Jeff Zeleny with details on the president's decision and what happens next.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT (voice over): Tonight, President Trump backing off a trade war with Mexico and Canada, for now, at least, even as tariffs on China are still looming.

DONALD TRUMP, U.S. PRESIDENT: When you're the pot of gold, the tariffs are very good, they're very powerful.

ZELENY: Trump reached a last minute deal with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau, agreeing to a month-long delay on 25 percent tariffs on all goods imported to the U.S. Both Mexico and Canada agreed to bolster security at the U.S. border and increase resources to crack down on fentanyl.

As he signed executive orders in the Oval Office today, we asked Trump if he blinked in striking a deal with Mexico.

REPORTER: Did you blink this morning?

TRUMP: There was no blinking. She's a wonderful woman, but she did agree to 10,000 soldiers on the border. I would say that's a lot.

ZELENY: Talks between Trump and Trudeau continued throughout the day. Following an afternoon phone call, the prime minister announced a deal, saying, Canada is making new commitments to appoint to a fentanyl czar. We will list cartels as terrorists, ensure 24/7 eyes on the border, but Mexico accounts for the vast majority of fentanyl, with more than 21,000 pounds crossing the Southern U.S. border last year and only 43 pounds coming in from Canada.

While Trump vowed to press ahead with a long term plan for tariffs in these countries and beyond, he said there could be short-term economic pain through higher prices or inflation.

TRUMP: Tariffs don't cause inflation, they cause success. It was big success. So, we're going to have great success. There could be some temporary short-term disruption, and people will understand that.

ZELENY: Among Americans, that remains an open question. Among Canadians, their resentment was clear as the Star Spangled Banner was met with jeers at a weekend hockey game.

Trump remains steadfast in his longstanding belief in tariffs, which the conservative Wall Street Journal editorial page blasted as the dumbest trade war in history. Rupert Murdoch, whose media empire includes the newspaper, visited the Oval Office today and was on hand as Trump spoke with reporters.

TRUMP: I'm going to have to talk to him. Not only is it not dumb, you're going to see, you're going to see, every single one of those countries is dying to make a deal.

(END VIDEOTAPE)

ZELENY (on camera): So, Trump saying tonight he was very pleased with that deal reached with Canada that includes sending about some 10,000 frontline personnel to the border. The White House press secretary, Phil, summing it up slightly in a different way, she said Canada is bending the knee just like Mexico. A White House official telling me tonight the tariffs for China, those 10 percent tariffs, are still expected to go into effect at midnight.

But the bottom line to all of this is here ,the president's appetite for tariffs remains very high. He said he wasn't focusing on the market reaction today, Phil. We both know he watches the market very closely.

MATTINGLY: Indeed he does. Jeff Zeleny live from the north lawn, thanks so much.

Now to Canada and CNN's Paula Newton. Paula, what are Canadian officials saying right now about this kind of roller coaster process they've been going through the last few days?

[18:05:02]

PAULA NEWTON, CNN CORRESPONDENT: Well, of course there is relief, but they're actually quite sober minded, I would say, about what's ahead. They are already thinking about this negotiation over the next 30 days. And you heard from just report there exactly the kind of framing the president has. And let's be clear, when the president goes to the table to try and negotiate any new deal with Canada, he's playing with a lot of cards in his hands.

Now, when we talk about what just was agreed upon on the border, look, he's not going to get many arguments from Canadians. A lot of Canadians are in support of having a stronger border as well. But, Phil, those, you know, specifications, the 10,000 personnel, the drones, the helicopters, all of that was already on the table. The Canadians, the Canadian government knows that this is about what comes next and he will want some trade concessions.

You know, Phil, I was at an auto parts plant today, Martinrea, they have plants in Mexico, the United States, and Canada. And their point is that any kind of uncertainty hurts all three countries, as far as they're concerned, quite equally. They want a deal done, they want it done quickly, and they will work within the parameters of whatever a win looks like for Donald Trump or Canada. But right now, they know that in the 30 days coming, there are going to be some hard negotiations. And you heard the president there talk about some of the areas that he wants opened up.

I think, though, another point, not just a market reaction, but I do know that the president was hearing from Canadians, that he knows well, saying, look, Canadians are really angry about this. And I don't think at the end of the day the president wanted to be made out to be a villain in all of this, so he decided for the 30-day reprieve, but some very serious and hard bargaining ahead, for sure.

MATTINGLY: Yes. The clock certainly is starting to tick again. Paula Newton, thanks so much.

Let's break all of this down with our political panel. Catherine Rampell, I want to start with you. According to the White House press secretary, quote, Canada is bending the knee just like Mexico. Is that what's happening here?

CATHERINE RAMPELL, CNN ECONOMICS AND POLITICAL COMMENTATOR: This is hilarious to me because Trump got rolled by both of these countries and no one, least of all Trump, seems to have realized it. Both the leaders of Mexico and Canada have agreed to do what they have already been doing. It's just that Trump didn't seem to know about it. Like, for example, the president of Mexico said that she would commit to having 10,000 troops at the U.S.-Mexico border. Guess what? There are already 15,000 people there, troops, military troops from Mexico there, and have been there for years. Trump didn't seem to notice this.

Same deal with Canada, Prime Minister Trudeau said, aha, we're going to spend $1.3 billion on investing in border security. Guess what? They announced that $1.3 billion last year. Oh, but they're also going to have a fentanyl czar and they're going to have 24/7 eyes on the border.

You know, this is about saving face, I guess. I don't know if nobody informs Trump that there are no actual concessions here, but that will, of course, not stop him from claiming victory.

MATTINGLY: We have certainly seen the claim of victory.

Scott Jennings, you know, I'm not going to act like Republicans are still a party of free trade that they had been in kind of iterations past. There's obviously been a transformation and a willingness to at least somewhat embrace what President Trump has made so clear as a focal point of his, really, entire agenda. But there are some Republicans that have raised some concerns about it, including this one. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: What about tariffs against our allies?

SEN. MITCH MCCONNELL (R-KY): It will drive the cost of everything up. In other words, it'll be paid for by American consumers. I mean, why would you want to get in a fight with your allies over this?

(END VIDEO CLIP)

MATTINGLY: You know that guy somewhat well, Scott, former Senate Majority Leader Mitch McConnell, your former boss as well. Is he wrong here?

SCOTT JENNINGS, CNN SENIOR POLITICAL COMMENTATOR: Well, I think that question was posed on 60 Minutes last night. Let's fast forward to what's happening right now. There are no tariffs. There's a pause on this because, as has been reported by CNN and every other news outlet, both Mexico and Canada have reached agreements today with Donald Trump to do what we want them to do, which is to put people and technology and resources at the border to stop the flow of people and drugs, illegal immigration, stem the tide. That is the whole point of this exercise. And that is apparently what is happening.

And, yes, there have been some troops there in Mexico. This is an agreement to do permanent deployment. And, yes, some of this stuff in Canada was already announced, but now they were dragging their feet. Now their feet are held to the fire. They've got 30 days to really implement and they can't pussyfoot around anymore.

So, the point of this exercise today to me had less to do with and more to do with saying to our neighbors, you need to be better neighbors. We are more important to your economy than you are to ours.

[18:10:01] So, you need to help us with our serious problem, which is illegal immigration and people dying from fentanyl. And they both said yes today, and that is a win for Donald Trump.

MATTINGLY: You know, Ashley, to kind of Scott's point in terms of claiming the victory, making clear publicly across every different platform, White House officials have a voice in and the president himself, it's what we're going to see. We've seen it before. It's a playbook. But it's a playbook that's been effective in terms of how the public receives it. What are Democrats doing in this moment?

ASHLEY ETIENNE, FORMER SENIOR ADVISER TO PRESIDENT BIDEN: Well, I mean, I think I would challenge your point about it being effective. I mean, what we're seeing right now is Donald Trump is actually using Americans' pocketbooks as a negotiating weapon in his trade wars. And it's having -- it's wreaking havoc on the economy as we actually speak. I mean, the markets fell here and abroad, globally. You've had a situation where investors are pulling their stocks from companies that they think are going to be hardest hit by tariffs. You've got us industry-based from homebuilders to manufacturing as well as retailers saying that, you know, the prices are going to spike and the American people are going to pay a price.

So, this isn't over, you know, and the reality is this is just a betrayal of what Donald Trump promised the American people, and that was that he was going to lower prices on day one. So, Trump's trade wars are not over and they're not in the effect of them could be felt and they're going to be felt by the American public in their pocketbooks.

MATTINGLY: Catherine, to Ashley's point, quantify what the actual impact is here for people saying, look, the market bounced back, no tariffs were put into place, Trump got what he wanted, all is well, we'll do this again in 30 days. Is that kind of the reality from an economic perspective?

RAMPELL: I mean, I don't know what Trump wanted in this situation. Again, he didn't actually get anything, but if he were to put these tariffs in place, they would be very painful for American consumers. Okay, Scott, I mean, this is public information.

JENNINGS: A total lie, I'm sorry. He got what he wanted. He got an agreement from our neighbors to do more on the board. That's what he wanted.

RAMPELL: To do exactly what they have all been doing.

JENNINGS: I mean, I understand you're the minister of propaganda tonight, but you don't have to be. You could just say, hey, all's well that ends well here. Come on.

RAMPELL: If you have, if you don't know that these countries are committing to do exactly what they have already been doing, either you haven't done your homework or you think the American people are idiots, because, again, they're doing exactly what they were already doing. JENNINGS: Or option three, Donald Trump is enforcing what needs to be done at the border, which is more help from our friends. They are our allies, and they are important people, but they need to help us, and they've not been helping us, and now they're going to help us even more.

RAMPELL: They have been.

ETIENNE: But the point is that it's --

RAMPELL: Dude, just accept the fact that he got owned.

JENNINGS: Ask every family with a fentanyl death how much they've been helping.

MATTINGLY: Scott, can I just ask you --

RAMPELL: No, they have done nothing more.

MATTINGLY: Scott, can I ask you, though? Like, this playbook is like he's got one play on some level. At some point, the market's going to stop taking this serious, I presume. I think part of the freak out this morning was everybody didn't really take it totally seriously given the scale of things. Is there ever going to come a point where he's going to actually do what he says on tariffs?

JENNINGS: Maybe. I don't know. I think it's dependent upon them. I mean, look, the reality is they have to do more, and we are more important to them than they are to us. We are a bigger economy. We are just a bigger player, and we have lots of equities at stake here beyond the economy, beyond trade. We had people all over this country dying, including in my home state of Kentucky, from fentanyl overdoses. It is a scourge. It is a disaster and it needs to be dealt with. The illegal immigration crisis is what propelled Trump back to the White House in the first place.

RAMPELL: So, why didn't Trump kill the funding -- whoa --

MATTINGLY: Just real quick, Catherine. Yes.

RAMPELL: If you're suggesting this is about reducing fentanyl deaths, which I agree is a hundred percent, a very important, critical national issue, why did Trump kill the funding last year that would have put in place better technology at our border to detect fentanyl? Trump killed that bipartisan bill.

JENNINGS: Donald Trump wasn't the president last year. He's the president now.

RAMPELL: He told all of the Republicans to kill it.

MATTINGLY: We got a lot more to get to. Guys, thank you very much.

JENNINGS: Dems are upset.

MATTINGLY: Scott, we're coming back. Relax. Okay. RAMPELL: This is your (INAUDIBLE).

MATTINGLY: We'll be back in a minute.

Well, just ahead, as the State Department takes control of USAID, is the dismantling of the Humanitarian Aid Organization essentially a done deal?

Plus, a new report on the potential demise of the Education Department. What it could mean for America's schools.

You're in The Situation Room.

(COMMERCIAL BREAK)

[18:15:00]

MATTINGLY: Tonight, Secretary of State Marco Rubio says the State Department is now overseeing and reviewing the US Agency for International Development or USAID, as President Trump and Elon Musk signal they may shut down the humanitarian organization.

Now, USAID is the world's largest foreign aid agency with around 10,000 employees across dozens of countries. Those jobs are in limbo right now, threatening their efforts to ease poverty to treat diseases and distribute medicine and to provide relief during natural disasters and famine overseas.

Supporters argue the agency is a vital tool for U.S. influence abroad. But the Trump administration claims it's too costly and riddled with fraud. Elon Musk portrayed it without evidence as a, quote, criminal organization. President Trump claims USAID is a tool of the left.

(BEGIN VIDEO CLIP)

TRUMP: I love the concept of it, yes, sure. I love the concept but they turn out to be radical left lunatics. And the concept of it is good but it's all about the people.

(END VIDEO CLIP)

MATTINGLY: Let's get more now with our political experts. Lulu Garcia-Navarro, these comments and the way this has kind of flooded about over the course of the last several days, what does it tell you about Trump, Musk, and kind of how they view the U.S. global leadership role?

LULU GARCIA-NAVARRO, CNN CONTRIBUTOR: Well, what it says is that Musk, first of all, is one of the richest men in the world and we don't know exactly why he's rooting around the federal government and he isn't very clear that there's any transparency, but he has taken against USAID.

[18:20:12]

And I find this ironic because what we've been hearing over and over again, and I should say here that I'm part Panamanian, is that, you know, they're upset about Chinese influence in places like Panama and other places, and yet they want to gut one of America's most effective tools in the world of soft power, of actually going into countries and giving money and helping people and influencing those countries to work with the United States.

And so by gutting this agency, what you're effectively doing is actually diminishing America's global leadership and global power.

MATTINGLY: Ashley Etienne, Rubio says, look, it's taxpayer funded, USAID should be aligned with American foreign policy. The State Department mission and USAID's mission should be kind of rowing along the same path. Is he wrong?

ETIENNE: Well, I mean, I think we shouldn't lose sight of what this is really actually about. You know, the White House has this statement that promises made and promises kept. And what we're seeing play out here is Donald Trump's promise to be a dictator on day one.

What he's really attempting to do is to expand the authority of the presidency. Bannon and Miller said that was goal in the first term. They didn't achieve it then. They're trying to achieve it now. You see a situation where the president is actually thwarting the authority of Congress' ability to legislate and to appropriate. You have a situation where Elon Musk is accessing sensitive data through the Treasury Department. What does granny's sensitive information have to do with cutting government waste? You've also got a situation where the president's purging the FBI, the State Department, and I.G.s.

This is all in an effort, again, to expand the authority of the presidency. I think it was Steve Miller that said it best. He said that the authority of the president will not be challenged, and that's what we're seeing happening right now.

Scott, I'm aware when it comes to foreign aid and when it comes to kind of the scale of what USAID does, this is like putting it on a tee for you on some level to just really wind up and take a swing. Republicans have had issues with this for a long time. Some of the projects and some of the grant recipients certainly have run afoul of where Republicans want to be over the course of decades, not just recently. But it is statutorily an independent entity.

This Republican Party is the rule of law party. There are ways to address this. There are ways to zero out funding. There are ways to review things or change it legislatively. This is not that way. What's the rationale here?

JENNINGS: Well, it is an entity that exists within the executive branch. That's number one. And it has often been at odds with the U.S. State Department. And that's not a good thing. As Marco Rubio said today, everything USAID does, or the bureaucracy does, needs to be aligned with the foreign policy goals of the United States. And so, putting Rubio in charge of USAID today helps begin to achieve that alignment.

I'm actually a supporter of American soft power. That's what we call it, soft power. I believe it's good. I believe it's often been used as a tool to help the United States combat influence from China and other adversaries around the world. But there is a difference between soft power and soft stupidity. So, whether you're funding like DEI musicals in some country or transgender surgery somewhere or whatever, that is not what most Americans --

GARCIA-NAVARRO: That's just absolutely not what is happening.

JENNINGS: That is not what most Americans would say is an effective tool of U.S. foreign policy.

GARCIA-NAVARRO: Just because you're slapping DEI on everything that --

JENNINGS: I'm not. I have a whole list right here. I mean, if you want me to forward it to you, I will. But the reality is, we have lots of money going to projects that don't do anything for the United States.

GARCIA-NAVARRO: Then cut those projects. Many governments do that.

JENNINGS: We are. Congrats. Welcome to the Republican Party. That's what we're doing.

GARCIA-NAVARRO: Why are you trying -- why are you locking people out of their office? Why are you trying to tell people to stop working? Why are you actually --

JENNINGS: Because the bureaucracy is nonresponsive. Because the bureaucracy is nonresponsive.

ETIENNE: Can I just add one thing?

MATTINGLY: Yes, Ashley, go ahead.

ETIENNE: It's hard to believe that someone that added $8 trillion to the U.S. deficit is really even serious about cutting costs. So, I don't buy this argument that this is an effort to cut costs and make sure that there's not any government waste.

JENNINGS: No, it's an effort to cut stupidity. These programs -- and I could read out the whole list. If you'll give me 60 seconds, I'll read the whole thing. But there is a difference between smart, soft power and dumb spending by left wing ideologues who inhabit this bureaucracy, and that's what they're doing.

ETIENNE: This is the president's efforts to undermine government one agency at a time. He signed an executive order to get rid of the Department of Education probably, as we speak. That's what this is all about. It's an effort to undermine our government one agency at a time.

JENNINGS: Who's running the government? I mean, I know you know how this works, but the president's in charge. He can't undermine your own government. He's in charge of the bureaucracy. And all they're asking for, Phil and everybody else, is for the money that we spend around the world to be aligned with U.S. foreign policy interests.

[18:25:07]

They have put out a long list of programs that have nothing to do with our interests. Why can't we go in and root that out and redirect the money coming from the secretary of state to the things that matter the most? That's it. That's all they want.

MATTINGLY: Scott, Ashley, Lulu, appreciate your time. Would note, State Department mission, state to state, near term foreign policy, diplomacy, USAID, a more broader population centric approach. But, Scott, to your point, as you said, you do support soft power. We'll see how this continues to play out. Guys, I really appreciate your time. Thanks so much.

Coming up, my investigation into some of President Trump's flatly untrue claims about the Panama Canal, as he once again threatens to try and take it back.

Stay with us. You're in The Situation Room.

(COMMERCIAL BREAK)

[18:30:00]

MATTINGLY: In the Oval Office today, President Trump once again insisted on taking back the Panama Canal. Just before Trump's inauguration, I took a trip to Panama to see the canal for myself and investigate some of his wildest claims.

(BEGIN VIDEOTAPE)

MATTINGLY (voice over): President Trump is not giving up his obsession with linking China and the Panama Canal, punctuated by this remarkable moment in his inaugural address.

TRUMP: China is operating the Panama Canal, and we didn't give it to China, we gave it to Panama, and we're taking it back.

MATTINGLY: That drew an immediate public condemnation and rejection from Panamanian President Jose Raul Mulino.

And privately, sources tell CNN, letters to the U.N. Secretary General and the U.N. Security Council lodging protest over their view Trump went so far as to violate the U.N. Charter with his threat.

So, what is the truth? Well, I toured the canal and its operations, getting exclusive access to try and separate fact from fiction.

There's no question Beijing's influence in Panama has grown over the course of the last couple of decades. Take a look at this memorial, this monument right near the base of the Panama Canal Pacific entrance. It underscores 150 years of relations between Panama and China, this one, of course, in relation to building the Panama Railroad, not exactly Panama Canal. It goes without saying monuments celebrating cultural ties, no matter its location, is far from what Trump claimed last month, when he wished Merry Christmas to Chinese troops he said were operating here.

Well, you can look, there's no actual Chinese soldiers on the ground, no Chinese troops, but Beijing's influence is obviously a number one issue.

Put that in the absurd fiction column.

I also checked with Ilya Espino de Marotta, deputy administrator of the canal, the autonomous agency that actually operates the canal, not China.

ILA ESPINO DE MAROTTA, PANAMA CANAL DEPUTY ADMINISTRATOR: We're very transparent. You can know that this is run 100 percent by Panamanians.

MATTINGLY: I haven't seen any Chinese soldiers operating.

DE MAROTTA: No.

MATTINGLY: I'm not missing anything?

DE MAROTTA: And you will not. No.

MATTINGLY: In fact, the Canal Authority says it had 8,549 employees in 2023. 8,541 were Panamanian Mark another under fiction.

But here's an undeniable fact, China's investment and influence here is substantial.

Right across the water, you see a port that was built by a subsidiary of a Hong Kong-based company.

That's the Port of Balboa, one of the busiest ports in Latin America and one of two operated by Hong Kong's Hutchison Ports located at each end of the canal. While not state-owned, they are subject to China's national security laws.

At the same time, Beijing's nearly seven fold acceleration in direct investment in the country was readily apparent around the waterway that serves as a fulcrum in U.S. strategic and economic power. A brick and mortar window into a reality, Trump's broad concern about China's influence is widely shared.

GEN. LAURA RICHARDSON, FORMER COMMANDER OF U.S. SOUTHERN COMMAND: I worry about the -- you know, they look like civilian companies or state-owned enterprises that could be used for dual use and could be quickly changed over to a military capability if they needed that to.

MATTINGLY: That warning from the commander of U.S. Southern Command back in 2022 has been echoed by national security officials and bipartisan lawmakers alike in recent years. But Trump, ironically, was never one of them in his first term, because that's exactly when China's rapid push into Panama really accelerated. Panama President Varela stunned U.S. officials when he cut ties with Taiwan and established formal relations with Beijing in 2017, just six days before Varela visited with Trump, a meeting where Trump never actually raised China, according to two sources in the room. Dozens of bilateral agreements between Panama and China followed, then Panama's entrance into China's Belt and Road Initiative, then a push toward a free trade agreement.

And just a few hundred yards from where I stood just a few days before Trump's inauguration is where Xi Jinping became the first Chinese leader in history to visit Panama, in the canal itself, a trip Trump never made in his first term, nor did he ever have his own ambassador here to represent his administration.

(END VIDEOTAPE)

MATTINGLY (on camera): The critical point here to remember is while that happened during Trump's first term, successive Panamanian administrations have actually shifted away from China, tried to move more towards its relationship with the U.S., including the current president, Jose Raul Mulino, who met with Secretary of State Marco Rubio during his trip down to Panama.

[18:35:09]

He was actually standing on the Panama Canal right where you saw me.

The issue that you hear from Panamanian officials is they don't really know what the Trump administration wants, but they are willing to talk and willing to try and do whatever is necessary to avoid what seems, from the president's words, to be a looming conflict.

Well, just ahead, is President Trump about to dismantle the Education Department? I'll speak to a Wall Street Journal reporter with the new insight into the administration's quest to remake the government.

(COMMERCIAL BREAK)

MATTINGLY: Well, President Trump's crusade to shrink and reshape the federal government, it appears to have a new target, the Education Department. The Wall Street Journal reports the Trump administration is weighing executive actions to dismantle the agency.

[18:40:01]

Joining me now is a reporter who helped break the story, Ken Thomas. Ken, I really appreciate your time. I think one of the questions everybody should be asking off the top here is, well, that's an agency that's in place by statute. How exactly do they want to do this?

KEN THOMAS, NATIONAL POLITICAL REPORTER, THE WALL STREET JOURNAL: Yes, I think White House officials tell us that they envision this as a two-step process. So, at first, you would acknowledge that Congress would need to act to abolish the Education Department, but there are secondly other steps that could be taken to essentially dismantle the department from within. They would remove, abolish any programs that are not part of statute and then they would try to move other programs to other agencies. So, there's been discussion previously, as you recall, of moving the student loan office into treasury, for example. So, that's how they envision it.

But, you know, you have to remember this is a difficult process. This is something that Ronald Reagan wanted to do back in the 1980s, and many Republicans who we've covered over the years, you know, have made this a goal, and yet, you know, you have to get 60 votes in the Senate to actually abolish the department. So, it definitely has a long road.

MATTINGLY: Yes. I mean, it's long been a unified position in the Republican primary. Everybody that we've covered has taken this position. However, they can do, to your point, by executive action. What would that mean for students?

THOMAS: Yes. Well, when you think we have a local control of our, you know, school systems around the country, but at the same time, what the Education Department does is very important. You know, they're involved in Title 1 schools, for example, for poor students, you know, they provide you know, support for disabled students. You know, they're involved in, you know, Title 9 enforcement. So, all of these wings of the department would essentially be shifted elsewhere. There's been some discussion in the past of moving some of these functions of the Labor Department, for example.

So, how this would work would be very complicated, but the idea of this executive order is to get that ball rolling and also by reducing the workforce. You know, we saw over the weekend a number of employees within the department got administrative leave. You know, we were told there were dozens of employees who got that. So, we could see certainly a reduction in the workforce.

MATTINGLY: Just real quick before I let you go. The secretary nominee has not been confirmed yet.

THOMAS: Right.

MATTINGLY: How's that going to play out?

THOMAS: So, that's a big complicating factor. Linda McMahon is the nominee to be education secretary. She has not had a hearing yet for confirmation. And there are some folks within the White House who are concerned that if they move forward with this executive order now, that could make things more difficult in her confirmation process.

There were concerns last week, for example, when we had the federal freeze on those government loans and initiatives. That could affect Russ Vought nomination for OMB.

MATTINGLY: Yes. It seems they've handled the Russ Vought situation. I think it made their lives a little bit more complicated on the DOE.

Ken Thomas, thanks so much to you and your team, great reporting as well.

Well, coming up, a Republican lawmaker reacts to the new headlines on President Trump's trade policies with American allies. Senator Tim Sheehy joins us live.

(COMMERCIAL BREAK)

[18:47:23]

PHIL MATTINGLY, CNN HOST: We're getting new reaction to the breaking news, President Trump backing off his plan to slap tariffs on Canada and Mexico, at least for now.

We're joined by Senator Tim Sheehy, Republican of Montana.

Senator, thanks so much for taking the time.

The Trump team making very clear this is a victory in their view. The White House says Canada and Mexico bent the knee. I think that's a quote there.

I think one of the questions is that in terms of what the countries are putting on the table, not dramatically different from what they outlined prior. We're going to do this again in 30 days. Do you feel like there is a clear victory here for the Trump White House?

SEN. TIM SHEEHY (R-MT): Well, I think what Trump's showing is he's going to use any and all means at his disposal to do what's right for the country. And, you know, there's really no surprise here. These are the policies he ran on eight years ago. It's what he ran on last year and won on in November, which is he wants to secure that border and the American people voted for that.

And he'll use any means he has to do that. We saw with Colombia a week ago, overnight, Colombian president said, we're not going to take migrants back -- criminal migrants back. And by the next day, he's sending his own air force one to get them. So I think were seeing victory after victory here, and he's going to keep the pressure on.

MATTINGLY: You know, back in the first term, you're very correct that the president has run on tariffs and run on utilizing tariffs across several fronts from his first campaign. I traveled to Montana during his first term. Farmers and ranchers there took a hit, and they received federal assistance because of that hit. But the hit was very real.

What are they telling you right now about kind of the uncertainty here?

SHEEHY: No, you're absolutely right. There's no question that there's concerns across many American small businesses with regard to what tariffs will do. But there's also equally significant concerns about the issues that are coming from the wide open border. The same farmers and ranchers that are very concerned about the potential impacts of tariffs. The tariffs are even more concerned about the fentanyl in the streets, the crime in their communities.

And that crime is very real on the northern border, too, Phil. It's not just the southern border. Tribal communities across Montana experienced fentanyl coming across from Canada into our communities, causing increasing opioid deaths and obviously violent crime as well. So it's a complicated issue, and we need to use every single tool we have. And in this case, tariffs have been a very effective tool to do that.

ZELENY: No argument with what you're saying about the fentanyl crisis or about border crossings. But in terms of kind of the cost benefit from farmers and ranchers, the potential of losing markets, the potential of prices going down, the difficulty that they faced in that first term, they're willing to trade that off in exchange. Is that how you feel about things?

SHEEHY: I don't necessarily think its a one for one trade. I mean, those are the same type of economic challenges they felt during the record inflation during the Biden administration, when we were pumping trillions of dollars into the economy, causing commodity prices, causing gas prices, causing equipment prices to become unaffordable for farmers and ranchers whose cost basis became so high they couldn't make a profit from their product either.

[18:50:09]

So no matter what we do, we're in a very complicated economic scenario here. But most importantly, safety in our streets is key. And securing those borders is the number one priority of this administration. And this is going to be a key tool to do that.

MATTINGLY: You know, the president also ran on deregulation, ran on trying to root out government waste. He certainly has an operator in Elon Musk that is attempting to lead the way on that.

I think my question is we kind of watch how he's attempted to operate in these first couple of weeks. If the shoe was on the other foot, if this was a major Democratic donor from Silicon Valley who came in having been the biggest donor during a Democratic president who ones campaign and was going through every single agency and changing things towards their kind of ideological bent.

How would you feel about that?

SHEEHY: Well, I think we've seen that pretty much in the Biden years. We had a tremendous amount of influence from the American left wing donors. We saw it in the Obama years. I mean, this is how modern day politics is working.

The reality is, the DOGE effort has been highly approved by Americans. Our own government accountability officer, the own GAO of our own government has said that our own government, ourselves essentially, is making up to half $1 trillion a year in faulty payments, payments to the wrong people, in the wrong amount, to the wrong account.

That could be fraudulent. They could just be wrong going into the ether, half $1 trillion a year. And we don't think that when our own government tells us that when our own DOD can't pass an audit, it's about time we do some very serious forensic introspection to figure out how we can be better stewards of our taxpayer dollars. That's what's going on here, and the fact that we have the most

successful businessman, arguably one of the smartest men in the world, doing it for free -- I think it's a pretty good deal for the American people.

MATTINGLY: Look, the GAO, in terms of a blueprint for what any kind of audit or rooting out of waste effort should entail, certainly is what they've been doing. I think their officials have made that very clear. And the difference is, is we don't really know what Elon Musk and his team are doing. Should there be transparency in that? Should there be transparency in terms of what systems are able to get access to, how they're actually operating?

SHEEHY: Well, I think we do know -- I mean, we're reading about it every day. You and I are talking about it. I think everything that's happening after only a week in office, were seeing a tremendous amount of breakneck progress. I mean, Elon Musk is doing yet again exactly what President Trump ran on.

There are no surprises here. I think the pearl clutching over every single day when a new announcement comes out. People, this is exactly what President Trump ran on. It's exactly what he said he was going to do. And now he's doing exactly what he said he was going to do.

And I think what we're seeing is the actual carrying out of policies that were very clearly stated they were going to happen. The government accountability process, the government efficiency process is now taking place. We're going to make sure that the government agencies that the American taxpayers pay for are operating effectively and for the benefit of our people.

MATTINGLY: Real quick, I do want to get this in before I let you go. Tulsi Gabbard picked up two very big votes today. Susan Collins, James Lankford, both coming out saying they're going to support her. I know you support the nomination as well.

But how do you feel that nomination is going to go, particularly in the wake of the questions about her refusal to call Edward Snowden a traitor during her hearing?

SHEEHY: Well, listen, Phil, I've been in the Senate for about three weeks now, so take my prediction for what its worth. But I think she's a great lady. I was actually stationed in Hawaii as a Navy SEAL when she was elected to Congress first. So she's a combat veteran officer like my -- my wife, also a marine combat veteran from Afghanistan.

I think very highly of Tulsi. She's an unconventional pick and she's unconventional for a good reason. She's going to approach things from a different point of view. She's an incredibly smart woman, and she's got my support.

MATTINGLY: Senator Tim Sheehy, appreciate your time, sir. Thanks so much.

SHEEHY: Thank you.

MATTINGLY: And coming up, new details on the deadly mid-air collision here in Washington.

(COMMERCIAL BREAK)

[18:58:12]

MATTINGLY: Salvage crews here in Washington have started recovering wreckage from the Potomac River as officials review new findings in the midair collision investigation.

CNN's Pete Muntean is at Reagan National Airport.

Pete, how did those recovery operations go today?

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Well, Phil, we just heard from salvage and recovery crews, and they made two big finds from the wreckage of American Airlines Flight 5342. Today from the Potomac River, they pulled up a nearly intact jet engine. Also, they recovered a large and jagged section of fuselage. From there, the parts will go to a hangar here on the Reagan National Airport property, where NTSB investigators will essentially line up the parts so they can recreate the view that the pilots had in the moments before disaster.

Remember the helicopter route just east of here remains closed temporarily. And today American Airlines said in a companywide memo that that is welcome news and that it will work with the administration and Congress to make sure that aviation remains safe.

I asked NTSB chair Jennifer Homendy an exclusive interview today whether or not that route should remain closed permanently. And this is what she told me.

(BEGIN VIDEO CLIP)

JENNIFER HOMENDY, CHAIR, NATIONAL TRANSPORTATION SAFETY BOARD: At any time, the NTSB can issue an urgent safety recommendation. We don't have to wait until the end. And if we see there's a need, well do it.

MUNTEAN: Do you think there will be an urgent recommendation out of this?

HOMENDY: I don't know, I think it's too early right now for me to say that. My hope is we don't have to issue an urgent safety recommendation because we could get voluntary action.

(END VIDEO CLIP)

MUNTEAN: American Airlines 5342, that flight data recorder and cockpit voice recorder is being reviewed by the NTSB. Also, the NTSB is reviewing a data and voice recorder of combined function from the Black Hawk helicopter. They say it is waterlogged. They have not been able to download all the video yet, and they are manually lining up the timestamps from that data recorder with the timestamps from on board American 5342. They say they could have some of the early findings from that Black Hawk data tomorrow -- Phil.

MATTINGLY: Very important exclusive interview. Pete Muntean, thanks so much.

I'm Phil Mattingly in THE SITUATION ROOM. Thank you very much for watching.

"ERIN BURNETT OUTFRONT" starts right now.