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The Situation Room

Rumors that Trump May Pause Tariffs; Trump to Meet with PM Netanyahu; Fears of Global Recession. Aired 10:30-11a ET

Aired April 07, 2025 - 10:30   ET

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

[10:30:00]

WOLF BLITZER, CNN ANCHOR: I want to go back to our CNN Business and Politics Correspondent, Vanessa Yurkevich. She's over at the New York Stock Exchange. So, do we know what's behind this whiplash? It went down big time. It opened about an hour or so ago, the markets. Now it's going back up. What's the latest?

VANESSA YURKEVIC, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes. Well, there was a brief rally initially because the European Union said that it was willing to negotiate and that it was considering dropping tariffs to 0 percent on industrial goods.

We actually saw the S&P move into the green, and there were cheers here on the floor of the New York Stock Exchange. And then, there was a little bit of a rumor about moves that the president may be making around tariffs. And we saw the Dow cross into the green and then the NASDAQ as well. And cheers again on the floor here.

But we are back down. We are back down again across all three indices. You can just see how investors are desperate for some good news about this trade war. Any inclination that major trading partners, which include the European Union, are willing to negotiate is a good sign. As you recall, President Trump lobbed a 20 percent tariff on the European Union. Now, they are coming to the table saying they're ready to negotiate.

But investors looking for more encouraging news like that throughout the day, and we could continue to see these small rallies throughout the day as we continue to hear news. But as you can see right there, the Dow back down about 500 points, guys.

BLITZER: Yes, we're watching it closely together with you. Vanessa Yurkevich at the Stock Exchange, thanks very, very much. Pamela.

PAMELA BROWN, CNN ANCHOR: Very volatile there. All right. So, let's turn over to Israel now. That's Prime Minister Benjamin Netanya, who is back in Washington and he's getting ready to meet with President Trump. Netanyahu is the first world leader to meet with Trump in person since last week's tariff blitz. Israel got slapped with a new 17 percent tariff even after it dropped tariffs on U.S. goods the day before.

BLITZER: With us here in the Situation Room, CNN Global Affairs Analyst Kim Dozier. Kim, thanks very much for joining us. President Trump, as you know, is looking to negotiate some sort of trade deal with Israel right now. Does he want to make that a potential model or blueprint for some of these other allies and countries in the Middle East to deal with this very sensitive and explosive issue?

KIMBERLY DOZIER, CNN GLOBAL AFFAIRS ANALYST: Look, you've got two leaders who need a win. Netanyahu is facing a lot of unrest and political turmoil at home, and he flies straight back from these meetings to up here in his ongoing corruption trial. The hearing actually had to get delayed because of this emergency meeting to D.C. If he can go back to Israel with the win of getting the 17 percent tariffs lifted before they even get imposed on Wednesday, then that is wind at his back.

For Trump also, he could be sending a signal that if you do -- if you drop all your tariffs against Israel -- against the U.S., this is, as you say, the kind of model that you could get in exchange. That would reassure the markets and it would also show -- that would be Trump showing the world that here's how he's going to employ his political power.

[10:35:00]

BROWN: But it's interesting though, because Israel did drop its tariffs the day before the announcement, right? And yet, the U.S. still slapped these tariffs on Israel. So, you have the tariff situation. Iran, of course, we were just talking about that with Congressman Zinke. And there's also the shooting of the Palestinian- American teens in the West Bank with one dying as a result, and the killing of more than a dozen Palestinian emergency medics in Gaza by the Israelis. How much do you think that will cast a shadow over this meeting today?

DOZIER: I just don't think it'll come up that much.

BROWN: Really?

DOZIER: Perhaps the Palestinian-American issue will come up. And I think the Israeli leader will have his defense lined up that they were engaging in some sort of activity throwing stones. And you're not going to see the kind of dressing down behind closed doors at least that you would've seen in the Biden administration.

The signal has been all along taking the IDF side, believing the IDF version of events. And the IDF has come out with the version of events over the weekend that some of those medics, that half of them, when their names were run against intelligence lists, were allegedly members of Hamas. So, I expected the White House will take those claims at face value and move on because, at this point, they are supporting Netanyahu in increasing the military pressure on Hamas by dividing up Gaza into military zones again to try to get the hostages out.

BLITZER: Kimberly Dozier, thanks very, very much.

BROWN: All right. And just ahead on this very busy Monday, communities underwater, but the flooding danger hasn't passed in parts of my home State of Kentucky. Up next, we'll find out what's being done to help folks who have just lost everything and are really struggling right now.

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[10:40:00]

BROWN: We are tracking new fallout from President Trump's trade war, fears of a recession as tariffs rattle the global economy. Joining us now is Democratic Congressman Morgan McGarvey of Kentucky. Congressman, thank you so much for coming on. I mean, first question is the obvious question, right, what impacts are these tariffs already having in your district or just the fear of what might happen?

REP. MORGAN MCGARVEY (D-KY), VETERANS' AFFAIRS COMMITTEE: Yes, I think the impacts are massive. You know, if you live in Kentucky, if you live in Louisville, Kentucky, where I live, you know, somebody who works in the bourbon industry. These aren't far off economic terms like tariff and retaliation and markets going up and down, this is somebody wondering down the street if they're going to have their job next week.

And so, we're seeing that already, but we don't have to guess what's going to happen. We've seen what happened. When Trump was president the first time, he did the same thing. He had massive tax cuts. He put tariffs in place and the bourbon industry was devastated, cut our exports in half with Trump's previous tariffs. And those tariffs weren't as big as the tariffs he's proposing now. So, I think it's going to be absolutely devastating for the industry.

BROWN: Yes, the bourbon industry is just such a big industry in Kentucky, and you have to wonder about the ripple effect, right, if they're impacted. And the jobs and what's going to happen in my beloved home state right there.

MCGARVEY: Yes.

BROWN: You know, the president, he is sort of saying, look, everyone, there's going to be some short-term pain because this is going to lead to a manufacturing renaissance here in the U.S. and really incentivize people to buy American. Are you seeing any evidence that that could happen? I mean, do -- you know, do you -- can you see the good in that?

MCGARVEY: Yes. Look, I want manufacturing jobs in the United States. I want more manufacturing jobs in the United States. But again, look at what happened when Trump did this the first time, manufacturing actually declined. Then under the Biden administration, it picked up again because, you know, tariffs -- when we talk about tariffs, tariffs are neither good nor bad. Tariffs are a tool. A hammer is neither good nor bad. It's good for putting a nail on the wall. It's not so good for fixing your iPad. How you use these tariffs matters.

And so, if you're using tariffs in a targeted way with policies like saying, hey, we want more semiconductor chips built here in the United States for manufacturing purposes, for national security purposes. So, we're going to put policies in place that incentivize it. And we're going to put a tariff on this industry to further encourage to buy these chips in America. That's the kind of thing that works. It leads to more jobs. It leads to better production here at home.

But when you just throw these tariffs across the board and on our allies, right, I understand why we're putting tariffs on China, they're competing unfairly. They're adversaries of ours. But these across-the-board tariffs on our allies where we are doing good trade, this did not work when Trump was president the first time. The markets are saying it's not going to work this time. There's no reason to think it's going to work.

BROWN: And the Trump administration has argued, well, look, when we did this the first time that, you know, inflation didn't really go up, it held steady. But this clearly is different. This is much more aggressive and I think you're seeing it in the markets right now, the volatility and the uncertainty kind of fueling that of what this means. And you have lawmakers also pushing to reclaim congressional authority over tariffs. Do you think there's enough bipartisan support for something like that to pass with a veto proof majority?

MCGARVEY: I would certainly hope so. You saw it pass on a bipartisan basis in the Senate. I don't think Mike Johnson is going to bring it up for a vote in the House. And maybe because there is a fear it would pass. I mean, look, you know, the Trump administration is out there defending these policies that I guess they have to do right now, but they cannot defend what happened the first time. Again, manufacturing went down, the trade deficit increased, and the national debt increased with their policies under the last time they tried this. There's no reason to think it's going to be different this time.

BROWN: And there was a manufacturing -- a mild recession. You're right. And I believe in the fall of 2019, when Trump was in office the first time, when it came to the manufacturing industry. So, I want to also ask you about something else that's going on in Kentucky and that these devastating storms there.

[10:45:00]

We're seeing the images of all the flooding. Give us an update on the ground. Is Kentucky getting the help that it needs?

MCGARVEY: Yes. I mean, we've been battered. And not just the storms this last week the, there were storms in parts of the state a couple weeks ago with really bad flooding. These are awful. I'm a lifelong Kentuckian. Lifelong Louisvillian. I don't think I've ever seen it this bad. We've already lost two Kentuckians to this.

We know that the Ohio River is not expected to crest until probably Wednesday, maybe Thursday of this week. You're looking at the 97 flood levels. And some parts of the state, they're comparing it to the flood of '37, which if you're a Kentucky kid, you've always heard people talk about the flood of '37. It's really devastating. It's damaging.

And no, I mean, this is where -- you know, policy sometimes has to meet the people. And so, when you're talking about making cuts to the National Weather Service, we don't have people on the ground in Louisville that were able to confirm the tornadoes that touched down in Louisville last week. We're not getting what we need, I think, necessarily from those services. But the president did work with our governor, Andy Beshear, to make sure that there is a federal declaration declared, we can start opening up those funds and I know the Kentucky delegation will be united on trying to get Kentucky the help it needs.

BROWN: Just to follow up on that, the National Weather Service did say that it wouldn't be able to survey the damage and confirm that suspected tornadoes for several days due to the staffing issues. Do you know though if it's because of the cuss the Trump administration made, or they said in a statement that a lot of people are on spring break and off right now, and that is why, but we're trying to get a better sense of what's going on?

MCGARVEY: Well, in Kentucky they've had a. 35 percent reduction in staff because of these budget cuts. And so, yes, it was spring break in a lot of parts of Kentucky, last week's spring break in parts of Kentucky this week. But there's been a 35 percent cut there. And I talked to officials in Louisville who directly blame this on some of the staffing cuts.

BROWN: And what are the consequences of that? Help us better understand.

MCGARVEY: Yes. I mean, we need to have people out there to confirm what's happened, to know what's happened, to warn in advance of what's happening. And so, what ended up happening in Louisville, because we didn't have the National Weather Service, we had to send county emergency people out there who work from Jefferson County to say whether there were tornadoes. By doing that they weren't doing the other jobs that they could do to give people the help they need in this type of disaster.

BROWN: And when the river crests, what are you expecting?

MCGARVEY: Yes. I mean, when the Ohio River crest, you know, and so many of our population centers in Kentucky are still along the Ohio River, just based on how people originally got to the state, there have probably some people forced out of their homes. Certainly, road closures. I mean, I can tell you right now my kids are off school today because of the flooding. There's no reason to think that's going to change in the coming days. Lots of kids off of school. You know what that means for parents and childcare. Lots of homes that are damaged.

I mean, we lived in our house for 18 years. It's the first time we remember having this type of water in our basement in Louisville, Kentucky. And we're lucky. I mean, we're so lucky because we live a little bit away from the river. So, you know, people close are experiencing much, much worse.

BROWN: All right. Congressman Morgan McGarvey, thank you so much.

MCGARVEY: Thank you. BLITZER: Good luck to all the folks in Kentucky. A great, great state indeed. All right. Guys, thank you. Coming up, for the men, one game left to win it all. CNN Sports Anchor Coy Wire is in San Antonio as the Florida Gators and the Houston Cougars are set to face off in the men's basketball final.

COY WIRE, CNN SPORTS ANCHOR: Yes, Wolf. We're here on the beautiful river walk in San Antonio, soaking in some of the calm before the chaos of tonight's national title game. The Gators, the Cougars, going toe to toe in one last dance. We caught up with both head coaches to get their thoughts on the big moment. We'll have that in a preview coming up.

(COMMERCIAL BREAK)

[10:50:00]

BROWN: All right. Happening now, the Huskies are coming home with some new hardware. The UConn women's basketball team led by head coach Geno Auriemma winning a record 12th championship in the program storied history. They were dominant in their victory over South Carolina Sunday in Tampa. And happening tonight, Florida and Houston take the floor for the men's final in San Antonio.

BLITZER: And that's of course where we find CNN Sports Anchor Coy Wire who's joining us right now. Coy, I know you had a chance to speak with both men's head coaches as well as one of Florida's biggest fans. How are everybody's nerves ahead of this major, major game tonight? How are everyone feeling?

WIRE: It is great. The hair on my head is standing up, Wolf. This Final Four was in any indication of what we're in for tonight, buckle up. Coach Kelvin Sampson's Houston Cougars just pulled off one of the greatest final four comebacks we've ever seen. Upsetting Duke. They are tough. They are gritty. The nation's best defense.

They're facing Todd Golden's Florida Gators who bring the juice. They're always dancing, having fun. And so, are their fans, including superfan, our very own Gator alum, Sara Sidner, here with her team watching them punch their tickets to the title game. She said she couldn't walk away because she didn't want to jinx anything, Wolf. So, that's got us to wondering if either of these coaches are superstitious. Listen to this.

(BEGIN VIDEO CLIP)

TODD GOLDEN, FLORIDA MEN'S BASKETBALL HEAD COACH: I would say a little stitious. A little stitious.

WIRE: Is there anything quirky, unique that you do?

GOLDEN: Not really to be honest. I like drinking a soda pop right before the game to make sure I'm getting a little energy, a little caffeine.

KELVIN SAMPSON, HOUSTON MEN'S BASKETBALL HEAD COACH: So, I'm wearing this gray polo. And that outfit were 31 and one.

WIRE: OK.

SAMPSON: So, I'm about to wear the thread at them things. The color wearing out of that gray. My wife's washed the shirt so many times it's -- I think the collar just droops now. So -- but, you know, I don't look very good anyway. So, I wear a droopy shirt really well.

(END VIDEO CLIP)

WIRE: Coach Kelvin Sampson, a 40-plus year coach in career. He's seeking his and Houston's first ever championship. Florida is seeking their first title in 18 years. Tipoff is 8:50 Eastern.

[10:55:00]

And word is that that Sara Sidner, after the show today, was going to try to find a way to fly her way back down here to San Antonio if those Gators pull off the win. We might see her swimming in this river walk after the big win.

BROWN: She should.

BLITZER: She was excited.

BROWN: Yes. CNN should give her day off to do that. Come on, CNN.

BLITZER: It's an amazing game. All right. Coy Wire on the scene for us, as he always is, thank you very, very much.

BROWN: And coming up, Kentucky Governor Andy Beshear joins us as Rivers could rise to record levels in areas that are already flooded.

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[11:00:00]