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Wall Street Volatile Global Market Sink As Recession Fears Grow; Gov. Andy Beshear (D-KY), Is Interviewed About Deadly Flooding; Trump Asks Supreme Court To Block Order Requiring U.S. To Bring Back Man Mistakenly Deported To El Salvador. Aired 11-11:30a ET

Aired April 07, 2025 - 11:00   ET

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

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[11:00:21]

PAMELA BROWN, CNN ANCHOR: I'm Pamela Brown. Happening now, breaking news, Wall Street whiplash, huge savings after an unfunded rumor President Trump may pause his tariffs.

WOLF BLITZER, CNN ANCHOR: Huge swings, we should say. Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer. You're in The Situation Room.

UNIDENTIFIED MALE: This is CNN Breaking News.

BLITZER: And we begin with the major breaking news. Fear tightens its grip on Wall Street this morning, pushing U.S. stocks briefly into bear market territory.

BROWN: Yes, swings, certainly not savings. The Dow is trying to avoid a third straight day of steep losses as President Trump's historic tariffs fumes of a global recession.

The CEO of the nation's largest bank, J.P. Morgan, issued this blunt warning. Quote, Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth. So let's go live now to CNN business and politics correspondent, Vanessa Yurkevich, at the New York Stock Exchange. Vanessa, what is behind this market whiplash?

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Yes, Pamela, just after 10:00 a.m. a tweet went out saying that the President was considering a 90-day pause on tariffs for all countries except for China. Shortly after that tweet went out, we saw the S&P, the Dow, and the Nasdaq all enter the green. And there were cheers here on the floor of the New York Stock Exchange.

But shortly after, the White House came out and said that that was fake news, that the President is not considering a 90-day pause for all countries except China. And then you saw markets go back down into the red. This is just a classic case of what happens when there's a rumor, an unfounded rumor, which just shows the desperation that investors have right now for some sense of an indication that this trade war may be pausing or there may be a de-escalation of this trade war.

Now, as you can see on your screen, this may have broken the ice a little bit, even though it turned out not to be true. You can see the Nasdaq up there, the S&P as well, the Dow down just about 115 points. But I was speaking to an investor earlier today who said that we could see this throughout the day.

We could see little rallies as news started to trickle out about negotiations that may be happening between the United States and other countries. Now, that tweet about the 90-day pause is not true, but there are conversations going on with foreign countries and the United States about a de-escalation. Investors, though, really looking for some solid, solid information from the White House, though, that tariff rates are going to be dropping, not holding steady, and certainly not escalations going forward, Pamela.

BROWN: All right, Vanessa Yurkevich, thank you so much.

BLITZER: All right, Pamela, I want to continue this conversation. Jeremy Siegel is the professor emeritus of finance at the Wharton School of Business at the University of Pennsylvania. Thanks so much, Professor, for joining us this morning. As you probably noticed, the markets were positive briefly on an unfounded rumor that President Trump may pause the actual implementation of these tariffs. What does this market volatility tell you right now about what's going on?

JEREMY SIEGEL, PROFESSOR EMERITUS OF FINANCE, UNIV. OF PENNSYLVANIA: Well, Wolf, it shows you how much Wall Street hates these tariffs. Any news that they're going to be paused causes it to go up. Any news that it's going to be persistent will cause it to go down. You know, it is a disaster for the U.S. economy, and if they persist, I think a recession is inevitable.

BROWN: What about the idea of stagflation? You heard Jamie Dimon talking about the concerns of, you know, growth slowing and inflation going up.

SIEGEL: Yes, I mean, the tariffs will raise prices, and the -- the tariffs will cause a recession. I mean, the fortunate thing is that the Fed can keep the inflation from continuing to get worse. They have tools to do that, but the tools to prevent a recession with the tariffs of these magnitudes are -- are really limited.

BLITZER: How much long-term damage, Professor, do you think this is doing to the U.S. economy?

SIEGEL: Well, it's a human mistake. It's a policy mistake. It can be reversed, but, you know, just the -- the world saying, my God, America has all this unpredictable policy, the anti-American feelings towards us, boycotting our goods and everything, that -- that's going to take a lot longer than just a few months to disappear, even if the tariffs do.

BLITZER: Yes, so I just want to follow up on that, because I -- I hear concern from economists that perhaps some of the other countries that we trade with now, they might say, look, you know what, the U.S. is too unpredictable. We're going to find other countries to trade with, and do you really see that reality playing out, where we could sort of lose our footing as this global superpower as it pertains to trade and the economy?

[11:05:20]

SIEGEL: Well, I think we're still the superpower, but maybe a little less of a superpower. I mean, that uncertainty is just not good for our trade. And it's -- it, you know, really, you know, Trump has a very big misunderstanding of -- of trade deficits.

Actually, it's one of the things that caused us to be a reserve currency around the world. We need them to keep these assets. They help fund our deficit, and the -- these -- these Trump tariffs threaten the economy on both those ends.

BLITZER: The White House, Professor, says it's talking right now to more than 50 countries. Does that give you hope that potential deals will be worked out and everything will calibrate?

SIEGEL: It gives me hope. And, yes, I mean, that's what we want. We -- we want a reduction in -- in tariffs. I mean, even Elon Musk said he would want zero tariffs in the United States and even zero tariffs in Europe. To the extent we can get those tariffs back down to the levels that existed before, you know, Trump took office, that would be a huge positive for the economy. And if we can negotiate even fair tariffs, you know, that would even be better.

BLITZER: Professor Jeremy Siegel, thanks very much for joining us. Thank you so much.

BROWN: Thank you so much.

And happening now, Kentucky is under a state of emergency as widespread flooding triggers evacuations and calls to move to higher ground. Rain and violent storms have pummeled parts of the central and southern U.S. over the past several days. At least 19 people across seven states are confirmed dead. Here's how one Kentucky lawmaker described the situation there.

(BEGIN VIDEO CLIP)

REP. MIKE HART (R-KY): The city of Butler, it's pretty much shut off for people getting in and out. It's getting really, really tight, and if the water comes up another foot, you won't be able to get in or out without a boat or a helicopter.

(END VIDEO CLIP)

BROWN: Joining us now is Kentucky Governor Andy Beshear. Governor, thank you for your time. I know how busy you are. We just heard that some homes there are only reachable by boat or helicopter. Are you seeing a lot of that right now? GOV. ANDY BESHEAR (D-KY): We are. We have had four days of severe weather, which has caused some of the most significant flooding, especially in the western part of our state, that we've ever seen.

Here in the capital city, we -- we had a major risk of the river flooding at the highest level ever, it looks like it's going to be just below it, but dozens upon dozens of homes are going to be entirely ruined. This is a massive event that thankfully thus far we've only lost two individuals, though we have a third missing, but we're still not out of the woods. It's going to take days for the river flooding to -- to recede. And we need to make sure people aren't driving through high water, that people are staying with relatives if they live in a dangerous place.

But this has been yet another major natural disaster that's hit Kentucky, the 14th federally declared disaster since I became governor five and a half years ago.

BROWN: Kentucky just keeps getting pummeled by severe weather. And frank, for where you are right now, the -- the river there, the Kentucky River, is forecast to crest at a record 49.5 feet. Can the city's flood protections handle that? What are you expecting?

BESHEAR: So we just crested this morning, and it was a little below that. The levee walls have held, and we're really grateful for that. But that doesn't mean that there aren't dozens of -- of homes that are completely submerged, others that had four or five feet of water.

It's been a really significant event that's hit a number of businesses here. But you go all across Kentucky. There are towns in Nelson County that were fully submerged, Hopkinsville in the west as well.

What is different about this event is it was truly statewide. We had rescues going on in Graves County in our far west and in Powell County in -- in the east, all at the same time. What I can say is our first responders have been incredible, and because of the National Weather Service and our meteorologists, we were ready.

We had teams spread out throughout the state. We had the boats ready to go, and brave men and women made sure they got people to safety. That's the importance of the National Weather Service. That's the importance of all of our meteorologists. If they give us time, we can prepare and be as ready as we can be.

BROWN: You're emphasizing the importance of the National Weather Service. It says it won't be able to survey the damage and confirm suspected tornadoes for several days due to staffing issues. Now, the office said it's due to spring break and several people having time off scheduled. But, you know, we asked if anyone was laid off recently or took the buyout from the Trump administration, he wouldn't comment on that. What do you know about that?

[11:10:06]

BESHEAR: Well, first, let me say that President Trump and Secretary Noem have answered the call every time we've asked. They very quickly signed the disaster declarations. They approved individual and public assistance in our floods in February.

I've been highly critical of the President on a number of different topics, but that has not stopped them from doing the right thing and doing it quickly in these circumstances. So let me tell you, their FEMA's operating really well, and I've seen a lot of FEMA over the years. And that's why I hope they will keep FEMA intact.

This is, again, the best operations that I have seen since I've been governor. It's providing quick help to our people, which shows you what a strong FEMA can do. It's not about breaking it. It's about fixing it or making it better. And we have lost a lot of folks from the National Weather Service. We're still to the point where they're able to give us the forecast.

I get them directly as governor. But I do hope the administration, in seeing all these natural disasters and how important it is that we respond the best every time, maybe reverses some of those cuts, and I'd be happy to talk to them about it, because, again, the help they've given us in Kentucky has been really good.

BROWN: I want to ask you about tariffs before we let you go and the impact on Kentucky. It's, of course, the bourbon industry. It's such a huge industry in Kentucky. How are you preparing, and what do you think about Trump's tariffs?

BESHEAR: These tariffs are devastating, and all they are is a tax on our people. They're going to cause prices to go up. You know, tariffs on Canada cause gas prices to go up. Tariffs on Mexico cause food prices to go up. Tariffs on lumber cause home prices to go up. And the amount they go up is the Trump tax. The amount you're paying extra on everything is the Trump tax.

But while we've got a big bourbon industry that's getting hit and hit hard, and -- and -- and you feel for all those people because it's not just the distillers, it's the farmers, it's the truck drivers, but our number-one export is aerospace. Our number-three export is automotive. And so you look at those with our number-one trading partner being Canada and then the importance of the E.U.

You look at foreign direct investment, and our number-one foreign direct investor is Japan. I mean, we are a part of a global economy that is getting hammered under these tariffs. And -- and again, while -- while I -- I just previously said the President is doing a great job in this FEMA response, these tariffs are devastating, will harm our people, will raise prices, will make it harder to pay bills at the end of the month.

They're a bad idea, and they're his action and his action alone. I hope, whether it's seeing what's happening to the market, seeing the fact that our -- our country was growing and -- and now looks like it will be shrinking, whatever indication you want to see, unemployment or the rest, this is going to hit the -- the folks in my state harder than most, but it's going to hit all Americans, and it's entirely unnecessary.

BROWN: Governor Andy Beshear, thank you so much, and best of luck with everything as you deal with the flooding there in Kentucky.

BESHEAR: Thank you.

BLITZER: And, Pamela, as you know, very impressive interview with the governor of Kentucky, and now a lot of our viewers who aren't necessarily all that familiar with him will begin to appreciate the talk behind the scenes about him in 2028. Let's see what happens on that front.

BROWN: Yes. Absolutely. Yes.

[11:13:24]

BLITZER: And still ahead, there's more breaking news we're following. President Trump asking the U.S. Supreme Court to block an order requiring the U.S. to bring back a man mistakenly deported to El Salvador. We'll have much more on that breaking news right after this.

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BLITZER: All right. There's more breaking news coming in to CNN right now. The Trump administration wants the nation's highest court, the United States Supreme Court, to block today's deadline to return a man to the United States who was mistakenly deported to El Salvador.

BROWN: We have CNN chief Supreme Court analyst Joan Biskupic and CNN correspondent Priscilla Alvarez with us. Joan, I want to start with you.

JOAN BISKUPIC, CNN SENIOR SUPREME COURT ANALYST: Sure.

BROWN: Is this something the Supreme Court will touch?

BISKUPIC: Yes, it has to touch it. And they have to touch it by 11:59 tonight because a district court order has said that this man needs to be returned.

So there -- there's, you know, everyone is under the gun here. The Trump administration has said, please act. It even jumped over initially in appellate court, which has ruled in the interim, also agreeing with the district court judge that this order should be fulfilled.

So right now it's going to be in the hands of these nine justices whether it allows this district court order that said that this man who was mistakenly sent to this notorious prison in El Salvador needs to be returned. And as I said, the clock is ticking. Let me just give you one sense of the kinds of dilemma here.

The -- the administration has conceded that it made a mistake in sending this Maryland man to deporting him with the others two weekends ago. But it has said that it does not have the control to get him back. The -- an appellate court that let the district court order stand just a few minutes ago, a judge, a Reagan judge by the name of J. Wilkinson, who these justices would, you know, might be aligned in terms of their will -- worldview, he wrote outright, there is no question that the government screwed up here.

[11:20:03]

Abrego Garcia was subject to a withholding of removal order. He shouldn't have been sent there. And he says that, you know, part of the original order, as I'm sure Priscilla can elaborate on, was that he could face further persecution if he was sent there.

So you've got a really touchy situation for this Supreme Court, who's being -- that -- which is being implored by the Trump administration to intervene and not allow the district court order that would require the man to be brought back to stand. What the Trump administration lawyers are saying is that it would interfere with their foreign relations, their international negotiations, to allow the judiciary to intervene. It's said that the lower court judge didn't have jurisdiction here.

But this is a tough one for these nine justices, and I think it's going to be a very close call and under the gun before 11:59 tonight, Pamela.

BROWN: All right, Joan, thank you for that.

BLITZER: You know, it's interesting, Pamela, and I want to bring Priscilla into this conversation. Priscilla, you've been following this case very, very closely. What's your analysis right now? If the Trump administration acknowledges that it was a mistake to deport this Maryland man to El Salvador, why not take whatever steps are necessary to correct that mistake?

PRISCILLA ALVAREZ, CNN WHITE HOUSE REPORTER: Well, it has been a dizzying 72 hours, with the federal judge saying that the administration had to bring him back by 11:59 p.m. today and the federal judge at the time speaking to the urgency of this case because of the concerns of persecution in El Salvador. But to answer your question, Wolf, I'm going to read a line from this filing to the Supreme Court by the Trump administration, which I think just captures their argument quite clearly.

It says, but while the United States concedes that the removal to El Salvador was an administrative error, as they've said, that does not license district courts to seize control over foreign relations, treat the executive branch as a subordinate diplomat and demand that the United States let a member of a foreign terrorist organization into America tonight.

There's two key points there. The administration has repeatedly made the case about foreign relations. We're seeing it, for example, with student visas, that they have the authority, the executive has tremendous authority on immigration and the decisions that they decide to make.

And they're also linking this man to MS-13, which they've designated a foreign terrorist organization. I will say on that point, the federal judge has repeatedly asked for evidence to shore up that claim. The administration has not provided any. But this is the administration doing what we have seen them do before in the last couple months, which is exert their authority and say that they can do what they want and therefore cannot be moved by a court to bring someone back who they argue is in Salvadoran custody -- custody and not even in their control.

BLITZER: Yes. Let's see how all this unfolds. Priscilla, thank you very, very much.

BROWN: All right.

BLITZER: Pamela?

BROWN: And we have a lot of news coming up here on the show, Wolf. A high-stakes visit to the White House. Israeli Prime Minister Benjamin Netanyahu is set to become the first foreign leader to meet face-to- face with President Trump since he announced those sweeping tariffs.

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[11:27:37]

BROWN: We're following some breaking news. President Trump saying on social media that he will impose an additional 50 percent tariff on China that would be effective starting Wednesday.

The President says, quote, all talks with China concerning their requested meetings with us will be terminated. Negotiations with other countries, which have also requested meetings, will begin taking place immediately. He also says that basically if China does not withdraw its 34 percent increase above their already long-term trading abuses by tomorrow, that -- that -- those additional tariffs of 50 percent will go into effect on China.

We'll be going to our team at the New York Stock Exchange in just a moment. So much going on right now. Wolf?

BLITZER: And the Dow Jones, you can see, is down more than 1,000 points already. Also happening right now, the Israeli Prime Minister Benjamin Netanyahu is meeting with U.S. Middle East envoy Steve Witkoff. Netanyahu then heads into a meeting with President Trump. That's coming up soon.

After the U.S. announced the 17 percent tariff on Israel last week, trade is expected to be a key part of their conversation over at the White House. This is also President Trump's first in-person meeting with a foreign leader since he announced those sweeping tariffs. Let's bring in Leon Panetta right now.

He was Defense Secretary and head of the CIA under President Obama. Thanks so much for joining us. This is Prime Minister Netanyahu's second visit here to Washington since February. You've been watching the U.S. relationship with Israel for a very long time. Why do you think President Trump is embracing Prime Minister Netanyahu so closely right now? LEON PANETTA, FORMER DEFENSE SECRETARY: Well, obviously the United States and Israel are allies, but there's a lot to talk about right now, which is the whole issue of how to restore a ceasefire in Gaza and not have a continuing war, the whole issue with Iran and its nuclear capability, whether there is an effort to try to negotiate or take military action.

And then thirdly, obviously, the tariffs that have been raised on Israel I'm sure raise a concern that Netanyahu will certainly address in their meeting. So there's a lot of issues. Not only not -- only that, but the President is planning a trip to Saudi Arabia very soon. And so he has to be ready to try to deal with that relationship and hopefully expand the Abraham Accord. So there's a lot on the plate here for these two leaders to discuss.

[11:30:05]

BLITZER: And for Israel, it's critical right now. Most of the Israeli exports to the United States --