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Trade War Erupts, Markets Plunge as Trump Tariffs Take Effect; Trump Pauses Military Aid to Ukraine After Zelenskyy Clash; White House Officials Say, Trump to Defend Whirlwind First 100 Days to Congress. Aired 10-10:30a ET

Aired March 04, 2025 - 10:00   ET

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

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[10:00:00]

PAMELA BROWN, CNN ANCHOR: I'm Pamela Brown. Breaking news, sudden sticker shock. Target says its prices will likely rise in the next couple of days as President Trump escalates his trade war.

WOLF BLITZER, CNN ANCHOR: And severe impact, new CNN reporting on the pause of U.S. military aid to Ukraine as Russia attacks a key Ukrainian city with nearly 100 drones in an overnight aerial assault.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer. You're in The Situation Room.

And we begin with the breaking news in America's escalating trade war, and it's dramatic. This morning, the top U.S. trading partners are hitting back at President Trump's overnight tariffs. Right now, out on Wall Street, investors are weighing this new exchange of tariffs with Mexico, Canada and China. The Dow already down more than 500 points and the markets just opened. And inflation-weary Americans could soon feel the squeeze on their wallets big time. Prices of food, electronics and big ticket items, like cars, all potentially going up and up.

And there's more breaking news right now, Target becoming the latest top retailer to issue a specific warning about the U.S. economy. The CEO just a few moments ago saying sales fell last month. U.S. consumer confidence is weakening and Americans will feel the pinch almost immediately.

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BRIAN CORNELL, CEO, TARGET: The consumer will likely see price increases over the next couple of days. You think about all the fresh produce, you know, we depend on Mexico during the winter. We're going to try to make sure we can do everything we can to protect pricing. But if there's a 25 percent tariff, those prices will go up.

UNIDENTIFIED FEMALE: For things like what, strawberries, avocados, bananas? What are we talking?

CORNELL: You've got that list, right? UNIDENTIFIED FEMALE: Is that -- so that --

CORNELL: Those are some of the key items.

UNIDENTIFIED FEMALE: And those prices could change within days in the stores?

CORNELL: It could certainly over the next week.

(END VIDEO CLIP)

BLITZER: We're covering all the angles right now with CNN crews in China, Mexico and Canada.

Let's begin with our Correspondent Marc Stewart. He's in Beijing. Mark, China responded very quickly. What can you tell us?

MARC STEWART, CNN CORRESPONDENT: It's good to see you, Wolf. There is no question China thought hard about this. These latest tariffs are strategic and full of substance, targeting American farmers and people who work in agriculture, industries and sectors that were hit hard by tariffs previously back in 2018. These latest tariffs are now an additional 10 or 15 percent depending on the product, among the items on the list, things like beef, chicken, fruits and vegetables.

One item that really caught our attention, soybeans. China's pork industry depends on soybeans to feed its pigs. Soybeans were the highest value import from the United States last year.

But all of this isn't a real surprise, Wolf. It fits very much in China's foreign policy of tit for tat. You hurt us, we'll hurt you back. China, Wolf, is fighting back.

BLITZER: All right. Stand by.

Our Correspondent Valeria Leon is in Mexico City for us. Valeria, we just heard from Mexico's president vowing retaliation. What can you tell us?

VALERIA LEON, CNN CORRESPONDENT: Yes. President Sheinbaum announced that Mexico will respond to the tariff with tariff and non-tariff measures that she will announce in a public event on Sunday. And this means that so far we still don't know exactly what measures the Sheinbaum government is going to take.

But in the end, Mexico had no chance for a last-minute deal to skirt Trump's tariffs. Despite all Mexican government's efforts to do so, the tariffs went into effect, leaving a bitter aftertaste. Mexico's President Claudia Sheinbaum insisted that her administration did its part over the last month by beefing up the military presence along its northern border, which bought a month long pass of the tariffs. Wolf?

BLITZER: All right, standby as well.

Our Correspondent Paula Newton is in Ottawa for us.

[10:05:00]

Paula, Canada is the top trading partner with the United States. How are these new tariffs imposed by the Trump administration being viewed there?

PAULA NEWTON, CNN CORRESPONDENT: As an existential threat, and that comes from the government itself, Wolf. Now, we want to say Canada said it was ready, and at midnight, in fact, 12:01, it started to impose retaliatory tariffs. So, that's 25 percent on 30 billion Canadian right now. What does that involve, Wolf? Meat and vegetables, some dairy products.

Key here, though, Wolf, is that many provinces, including the largest, Ontario, Beginning to take U.S. alcohol off of its shelves, no longer willing to sell U.S. alcohol in Canada. A lot of provinces are going to be signing up to that right now.

We are waiting for more retaliatory moves. We're expecting a press conference from Prime Minister Trudeau in about a half an hour.

BLITZER: We'll see what he has to say. Paula, Valeria, and Mark, to all of you, thank you very much. Pamela?

BROWN: All right, Wolf. Let's continue this conversation. Joining us now is Democratic Senator Mark Warner of Virginia. He is the vice chairman of the Senate Intelligence Committee. Senator, thank you for joining us.

SEN. MARK WARNER (D-VA): Thank you, Pamela.

BROWN: So, Target's CEO was out this morning on CNBC talking about how customers are likely to see prices increase within days for fruits and veggies they get from Mexico. What do you think the impact will be on Americans' wallets in the coming days?

WARNER: Listen, Pamela, remember this was the guy, Trump, that was supposed to lower food prices. Instead, he's doing absolutely the opposite. We've already seen the stock market react. All of the Trump gains have been wiped out so far and the market's still going down. You hear from Target and everybody else, consumer prices are going to go dramatically up.

So, this is taking a -- can make a big hit on the American economy, as well as, frankly, completely ruining our relations with our two biggest partners, Canada, Mexico. If that was one -- that's only one part of the story.

The other part of the story, he has paused all military aid to Ukraine, completely pulling the rug out from under our Ukrainian allies, completely rejecting our alliance with the European allies. And what's kind of remarkable about this is that Russia's allies, China, Iran, North Korea, they're not slowing any of their military aid to Russia. So, we are kind of kneecapping Ukraine at this critical moment as well. This is a double-whammy, and now Trump's going to come in tonight and try to explain that to the American people.

I hope people realize when they see America weaker internationally, and when your food prices go up, where this is coming from.

BROWN: Just to continue the conversation on Russia and Ukraine and the impact, again, you are the vice chairman of the Senate Intelligence Committee. President Trump, he has posited Ukraine, as you mentioned, that follows the administration conceding at least two major points to Russia without negotiation, no NATO admission for Ukraine, and no return of Russian-held territories. Russia says the United States is aligning with it. Is the United States on Team Russia now?

WARNER: You know, I don't think the vast majority of Americans are. I don't think the vast majority of members of Congress, frankly, not just the Democrats but the Republicans as well. I wish more of them would find a little courage to stand up. But this has been, you know, a two-week streak. Remember a week ago last Monday, for the first time ever, America and the United Nations voted with Russia, Iran, North Korea, Nicaragua, denying who started the war in Ukraine. The whole world knows Russia started it. Now, you've got these efforts after the breakout in the White House or in the Oval Office last week, where they kind of cut the knees out from under Zelenskyy pulling this aid.

It sure as heck appears that Putin and Xi and authoritarian regimes around the world are seeing at least the American administration side with them more and more often. We've always stood with democracies. I think this is a sad day for democracies around the world.

BROWN: Do you think the U.S. still stands with democracies then from what you just laid out?

WARNER: I think the American people still stand with democracies. I think the American --

BROWN: But you don't think this White House does?

WARNER: Listen, the actions of this White House speak loudly. They have cut off all aid to Ukraine, which basically puts them in league with the Russian brutal invasion of Ukraine.

I think it is disgusting. I think it goes against 70 years of bipartisan consensus that we need to stand up against authoritarian regimes. And I'm not sure how he's going to be able to back his way out of this, Trump, other than giving up on Ukraine. And if Putin is successful in Ukraine, he won't stop there. It will be a green light for President Xi to go after Taiwan in Asia and the South China Sea. And I think, again, at the end of the day, this is going to make America weaker.

I asked the commerce secretary, Howard Lutnick, about this, about what the administration is doing here in regards to Russia.

[10:10:02]

He talked about how basically trying to bring Putin to the table. This is what he said. I want to get your reaction.

(BEGIN VIDEO CLIP) HOWARD LUTNICK, COMMERCE SECRETARY: We've given $300 billion to Ukraine. Is it difficult to see what side we're on? Give me a break. I mean, this concept of people getting confused is absurd. The president is on Ukraine's side and he said it. He said, I'll give them more military aid. He said it. But he said he'll do it if he can get to peace. And he needs peace. And he needs President Zelenskyy to say, I want peace, and he wants Putin to say, I want peace, and then the president will bring them together, and you'll see the greatest peacemaker, because he knows you got to hit both sides in order to get to the middle.

(END VIDEO CLIP)

BROWN: A couple of things to note, after that interview, the president decided to pause aid to Ukraine. Also, fact check, according to the Kiel Institute, a German think tank, the U.S. has actually allocated about $119 billion to Ukraine, not the $300 billion that he is talking about there, so important to note that.

But what do you think about Lutnick's point, that the U.S. has been on Ukraine's side, and that Trump is just trying to make a deal in his Trump way?

WARNER: Well, listen, the U.S. with 80 percent support from Congress, Democrats and Republicans have supported this additional assistance to Ukraine. We know where this war started. Putin's aggression to try to take back the whole Soviet Union, the old Soviet Union, I think that's not good for America.

And, respectfully, you know, this team, which is -- they're supposed to be great negotiators. Why do they get in to all these Russian demands before you even start a negotiation? That is a negotiation deemed for failure. That is a negotiation that is set up for Putin to come out a big winner. Putin takes Ukraine or gets a terribly favorable settlement. That doesn't help world peace. The next thing Putin will look at will be the Baltic States, then Poland. This is all about reconstituting the old USSR.

And, again, it's not what most Americans believe. It's kind of an embarrassment. It's more than kind of an embarrassment. Who will ever count on us again, in terms of keeping our word? And, again, this is a bad day for democracies around the world. And, unfortunately, America's leadership of those democracies is candidly being questioned in capitals around the world.

The only winners, Putin and Russia, Xi and China, the Islamic leadership in Iran, you know, the dear leader in North Korea. Is that really the team that we want to be affiliated with?

BROWN: Senator Mark Warner, thank you so much.

WARNER: Thanks, Pam.

BLITZER: And very strong words from the Senator.

Still ahead, President Trump in primetime for the first time since returning to office. He will address a joint session of Congress tonight. The theme, according to the White House, the renewal of the American dream. So, what that might look like? We'll have details.

BROWN: And up next, Russia hits Ukraine overnight just as the U.S. pauses military aid. We are live in Kyiv with the real time implications.

You're in The Situation Room.

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[10:15:00]

BROWN: Ukrainians woke up to the news this morning that President Trump is cutting off all military aid to their country. This is just days after his clash with Ukrainian President Volodymyr Zelenskyy. This ban applies to all military equipment that isn't already inside Ukraine. Experts say the impact will likely be felt in a couple of months.

Well, Kremlin is praising this decision, saying it could push Ukraine toward the peace process.

BLITZER: Overnight, Pamela, Russia launched almost 1000 drones at the southern port city of Odessa, in Ukraine, injuring at least four people and damaging a children's hospital in Sumy.

Let's go live to see if that's Nick Paton Walsh. He's joining us from the Ukrainian capital of Kyiv right now.

Nick, is there a sense of panic in Ukraine over this US decision?

NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: Yes, in a shortest possible response, Wolf. Although there are bids to put a brave face on this. Ultimately, this is the key part of Ukraine's military assistance being pulled away and the most important sophisticated bits. We're told from Ukrainian source that intelligence sharing is not impacted. That's vital for Ukraine to know what the Russian enemy is doing, but what is going to be affected possibly running out in a matter of weeks.

And we know Ukraine counts them day by day of Patriot air defense missiles. They're the only thing that can shoot down Russian ballistic missiles that hammer Ukraine almost nightly. That is key. And also by May, June, if not earlier, critical artillery ammunition will likely run out as a result of this decision.

Now, I'm sure the Trump administration will defend this and say, this is about pressuring Zelenskyy towards peace. That's entirely have been defined. And also too, I think there are other suggestions here that we weren't likely to see a further injection of finance from the Trump administration. This is simply Biden administration aid being held up, but still real shock here, Wolf.

BROWN: And you have to ask, you know, trying to pressure him maybe on, on the deal, but also could this add pressure on Zelenskyy to possibly step aside as Ukraine's president, Nick?

WALSH: Yes. I mean, as we were reporting, the technical aspects of replacing a wartime president here in Ukraine basically make it impossible or would render a sense of political chaos that would just make the prosecution of the war by the Ukrainians almost impossible. But, yes, it adds pressure on Zelenskyy and that personal rift.

And Zelenskyy has a very hard choice now. He essentially seems to be being asked by the Trump administration to publicly apologize for the Oval Office incident, which they consider to have been his fault, to sign a rare earth mineral deal, which doesn't contain security guarantees that Ukraine needs, but does hand over much of Ukraine's wealth potentially for years and also commit to an unspecified peace, but from the Trump administration.

We don't know exactly what peace Trump is asking him to sign up to. Is it the peace that he is negotiating with Moscow, of which we know very little, and of which Ukraine is not involved? Is it the peace plan that the European partners are putting together for Trump, or is it a general sense by the president of the United States that the president of Ukraine is more willing to talk peace? That's a very difficult ask for a wartime commander. And on the other side, the plus of acceding to this, well, Ukraine would potentially get a continuation of aid that it thinks may run out anyway in the months ahead. It vitally needs those Patriots and intelligence, though. Wolf, Pamela?

[10:20:00]

BLITZER: Very quickly, Nick, before I let you go, have sirens been going off in the capital of Kyiv, where you are with Russian drones and other attacks coming in?

WALSH: Yes, this is nightly. I mean, for many nights while we've been here, we hear the air defense working here to shoot the drones down. Some nights, there are over 200. The last few nights, there have been just about 100. But this is attacking all across Ukraine. Civilians are being killed by this on a quite regular basis. And that's away from the hundreds that die on the front lines every single day.

So, be in no doubt, the pause in this aid will have very real world consequences on the number of Ukrainian lives lost in the months ahead.

BLITZER: All right. Nick Paton Walsh in Kyiv for us, stay safe over there. Thank you very, very much.

BROWN: Thank you, Nick.

And up next, President Trump was elected in part because he said he would bring down prices. But Americans are about to pay even more at the grocery store. Up next, we're joined by a senior adviser to the RNC on how President Trump should address prices tonight.

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[10:25:00] BLITZER: We're getting new information right now about President Trump's joint address to Congress later tonight. White House officials tell CNN the president will tout his delivery on campaign promises, explain the rapid changes during his first few weeks at office, and issue a call to action to Republican lawmakers. But Vice President J.D. Vance is suggesting President Trump will also, and I'm quoting him now, poke a little fun while delivering his message. Listen to this.

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J.D. VANCE, U.S. VICE PRESIDENT: I'm going to have fun tomorrow because the president of United States, he's going to make a lot of good arguments. He's going to talk about a lot of the successes that we've had in these first 45 days. He's also going to be himself, which means he's going to poke a little fun and we're going to have a good time tomorrow. So, I'm just going to try to enjoy it.

(END VIDEO CLIP)

BLITZER: All right, for more right now, I want to bring in Trump Campaign Adviser Danielle Alvarez. She's currently a senior adviser to the Republican National Committee. Danielle, thanks so much for joining us.

What does the president need, in your opinion, to say to reassure very anxious American voters tonight? And do you think this is the right time to, quote, poke fun, as the vice president is saying?

DANIELLE ALVAREZ, RNC SENIOR ADVISER: First of all, Wolf, congratulations on the new program and thank you for having me. Tonight is certainly a big night. It's a little different. Normally, the first address by the president of the United States is a joint address and not called a State of the Union. And that is because it's believed that the president hasn't had enough time in office to really address the State of the Union. But the reality is in the first month in office, President Trump and his administration have been sprinting. And so they will have quite a few accomplishments to tout.

Now, of course, as you teased there will be two audience that the president is talking to. First is directly in front of him is those members of Congress, who need to make sure to respond to the mandate that the American people delivered in November and help President Trump accomplish that America First agenda. But the second of course is the American people watching from home and how he talks to them.

And I do love what J.D. said, you know, the president, he likes to go off script at times, and so I do anticipate that he will have some fun. But that's what the American people love. They love to hear directly from their commander-in-chief. It's why he has done so many interviews and been so accessible to the media. It's why he posts so much on Truth, on X, because he likes to speak directly to the American people. So, it is important to remember those two audiences that he will be speaking to as he challenges Congress to deliver for the American people and touts the win so far.

BLITZER: Yes. And it's true, during his first few weeks, he's been very accessible, answering a lot of questions from the news media.

Danielle, we're told the president will also hold up Elon Musk as a leading example of his administration's swift action to try to change Washington. But as you know, many GOP lawmakers have been confronted by voters very angry about those DOGE cuts. So, is President Trump potentially making a mistake by putting a spotlight on that?

ALVAREZ: Absolutely not. We know that the American people in polling has showed us this, support what President Trump is doing and what DOGE is doing to cut waste, fraud and abuse. The research team at the RNC is looking into these protesters, these so-called protesters, which are actually Democrats Astro Turfing.

And it's really interesting. Democrats have had a really hard time getting their footing, understandably, because President Trump is talking about 80-20 issues, issues that the American people support, and Democrats playbook has always been about opposition to President Trump. But it's really hard to oppose when the American people support shutting down the southern border, support ending waste, fraud and abuse, support bringing peace between Israel and the Middle East.

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