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China Retaliates Against U.S., Increasing Tariffs to 84 Percent; .Trump Claims Countries are Kissing My A** to Get a Trade Deal; Trump Says, It is More Important Now Than Ever to Pass Budget Resolution. Aired 10-10:30a ET

Aired April 09, 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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PAMELA BROWN, CNN ANCHOR: I'm Pamela Brown. Happening now, breaking news, China and now the European Union retaliating with countermeasures. We are watching the markets as the Wall Street reacts to the escalating trade war with one of America's top trade partners.

WOLF BLITZER, CNN ANCHOR: And President Trump's treasury secretary is now brushing off the now 84 percent tariff on U.S. exports to China saying, and I'm quoting him now, so what? We have more reaction this morning from the White House as countries are looking for potential deals.

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

and we begin this hour with breaking news, a new shot fired in the world's escalating trade war. This morning, China has announced its own retaliatory tariff against the United States, an additional 84 percent tax on all U.S. goods imported into the country. It comes, Pamela --

BROWN: Just hours, Wolf, after Washington's 104 percent tax took effect on Chinese goods entering the U.S. President Trump's treasury secretary this morning saying China has made a huge mistake.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, U.S. TREASURY SECRETARY: I think it's unfortunate that the Chinese actually don't want to come and negotiate because they are the worst defenders in the international trading system. They have the most imbalanced economy in the history of the modern world. And, you know, I can tell you that this escalation is a loser for them. They are the surplus country. They're -- exports to the U.S. are five times our exports to China. So, you know, they can raise their tariffs, but so what?

(END VIDEO CLIP)

BLITZER: We're covering all the angles of this incredibly important development. CNN's Marc Stewart is joining us in Beijing, CNN Business and Politics Correspondent Vanessa Yurkevich is in New York following the U.S. markets.

Marc, let me begin with you. Is Beijing sending a very clear message right now that it won't back down?

MARC STEWART, CNN CORRESPONDENT: A very strong message, Wolf. China is basically telling the U.S. and the world that it's not playing around. These tariffs are a direct assault, in particular on the agriculture industry in the United States as well as farmers.

This is going to impact key commodities, people who produce things such as soybeans, who produce things such as corn. This is part of this fight to the end playbook that we've been hearing so much about in recent days from China.

I also want to talk about the timing of all of this. This is a war of economics, making this announcement two hours before the New York Stock Exchange opens could be a direct attack on the American markets. We don't know if this was deliberate. We don't know if this was a coincidence, but when we look at this broader economic battle, that's certainly a consideration that comes to mind.

As far as who will cave in first, who will move this battle into its next phase, it's not very clear because it, again, this Chinese defiance is very strong. In fact, yesterday, Chinese officials said that the United States isn't being genuine enough to have a conversation to talk about these serious topics.

Finally, Wolf, I should point out that this is a big point of discussion here in China, not just among government officials, not just in state media, which is the government's messenger service, but on Chinese social media. People are very energized about it. It's a topic that's been exploding. We've seen people talking about the need to fight the United States, Wolf.

BLITZER: All right. Marc Stewart in Beijing for us, Marc, thank you very much.

BROWN: Yes, that was really important context there from Marc.

Also breaking this morning, a prominent economist is warning that the economy is experiencing so many shocks at the same time that it will likely purge it into a recession, quote, this quarter.

Joining us now is CNN Business and Politics Correspondent Vanessa Yurkevich. Vanessa, the Dow has lost more than 4,500 points in a week. What message is the market sending right now?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, at this moment, Pamela, markets are actually up slightly. You have the NASDAQ up almost 2 percent, the S&P up about 1 percent, and the Dow up almost 1 percent.

[10:05:03]

And that's a really big difference from where we were this morning when futures were pointing sharply lower on this news that China was retaliating with an additional tariff of their own on U.S. exports.

One analyst, Sam Stovall, who's been in the industry for many, many years, said that traders are like surfers, and sometimes they make their own waves. And what you might be seeing here right now, Pamela, is traders buying stocks at their lows, bargain shopping. You see Apple stock, NVidia stock, which has been down for days and days and days, they're upright now.

But as you point out, there is a lot of conversations still about a recession. JPMorgan brought up their percentage of how -- what they think a recession might look like, a 60 percent chance that there could be a recession. And Jamie Dimon, the CEO, spoke just a little while ago about his thoughts on that. Listen,

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Do you personally expect a recession?

JAMIE DIMON, CEO, JPMORGAN CHASE: I am going to defer to my economists at this point, but I think probably that's a likely outcome.

(END VIDEO CLIP)

YURKEVICH: And while markets are up right now, this is a long road ahead. Analysts telling me that it is going to be a bumpy road. The only thing that will turn the tide here for the good will be a different message from the administration that they're backing off on this trade war. Pamela?

BROWN: And what also are we learning about what the E.U. plans to do, because we know they just voted on these countermeasures against the U.S.?

YURKEVICH: Yes. So, we know that they have something coming. Something is coming on April 15th, countermeasures to that 25 percent that the U.S. put on steel and aluminum.

However, for the U.S. consumer right now, people sitting at home are just trying to keep track of what's going on. But, for example, if you were to make an iPhone, we're talking about China now, if you're trying to make an iPhone in the United States, according to one analyst, that would cost about $3,500. That is not something that many Americans can afford right now. Also, if you're buying a pair of shoes, for example, according to the president of the Association of American Footwear, he says that a sneaker right now that costs Americans $150 just with the tariffs that have gone into a place in the last 24 hours, that could raise the price to $230.

So, we're waiting to hear what the E.U. says about the exact cost, about the exact tariff rate, but just look at that on your screen there. What a dramatic increase for American consumers as they're trying to keep up with this escalating trade war. Pamela?

YURKEVICH: Yes. Thank you for helping us better understand all of this, Vanessa. BLITZER: And there's more news coming up here. This hour we're answering your questions on tariffs and what they mean for you. You can send your questions to Pamela Brown @pamelabrowncnn, and she'll be speaking to the U.S. national editor for the Financial Times to try to help get sub serious answers. Pamela?

BROWN: Well, President Trump says that foreign leaders are calling up the White House and essentially groveling at his feet to avoid these new tariffs.

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DONALD TRUMP, U.S. PRESIDENT: These countries are calling us up kissing my (BLEEP). They are dying to make a deal. Please, please, sir, make a deal. I'll do anything. I'll do anything, sir.

(END VIDEO CLIP)

BROWN: But new reporting from Politico says of many countries that want to talk are still waiting by the phone for a reply from the White House.

Let's go live now to the White House in CNN's Alayna Treene. All right, Alayna, I'm just seeing now that President Trump is also posting on Truth Social as well in response to all of this. And what more can you tell us about these potential trade deals with these other countries?

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Oh, well, it's clear that, you know, the Trump administration and the White House is trying to communicate now, that the door is open for negotiating. I think it's still, you know, quite unclear what the exact formula will be for them to find a way to really reduce the tariffs in the levees that they have on their countries.

Now, excuse me, we do know today, and this is new reporting as a person familiar with this meeting told me that Vietnam's deputy prime minister is slated to meet with Treasury Secretary Scott Bessent this afternoon. We also heard from Bessent this morning though talking about and trying to ease some concerns perhaps of bankers, saying, you know, maybe right now is not Wall Street's turn is actually Main Street's term to grow. Take a listen to what he said.

(BEGIN VIDEO CLIP)

BESSENT: Last four decades, basically since I began my career in Wall Street, Wall Street has grown wealthier than ever before and it can continue to grow and do well. But for the next four years, the Trump agenda is focused on Main Street. It's Main Street's turn. It's Main Street's turn to hire workers. It's Main Street's turn to drive investment. And it's Main Street's turn to restore the American dream.

(END VIDEO CLIP)

TREENE: So, that's the treasury secretary's kind of argument here in defense of what's going on right now in the markets. He's really been one of the chief, you know, messengers for this tariff policy.

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But just to give you a sense of the other conversations, Pamela, that are going on behind the scenes, we know that this administration is currently in talks with Japan, South Korea, Italy's Prime Minister Meloni is coming to Washington next week, all of these countries really wanting to open the door to having these talks. We're also hearing behind the scenes that some people close to the White House are telling these countries to find ways to sweeten these deals with the president, really try to make it seem like, you know, the U.S. is getting the better end of the stick because that's exactly how the president sees it.

BROWN: All right. Alayna Treene for us from the White House, thanks so much, Wolf?

BLITZER: All right. President Trump is putting pressure on house Republicans right now to pass the Senate's budget plan posting just a short time ago on Truth Social, calling it imperative, his word, imperative. But at least a dozen House Republicans say they're not willing to go along with the Senate's plan.

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MANU RAJU, CNN ANCHOR AND CHIEF CONGRESSIONAL CORRESPONDENT: Are you still a no on the budget resolution?

REP. ELI CRANE (R-AZ): I'm leaning that way.

RAJU: What's your concern?

CRANE: What's that?

RAJU: What's your concern about it?

CRANE: Have you seen it?

RAJU: I've seen.

CRANE: It's pathetic.

REP. RYAN ZINKE (R-MT): There's a cost on extending the tax provisions. This is a cost on campaign promises. At the end of the day, they have to balance it. I don't think we should go further into debt.

(END VIDEO CLIP)

BLITZER: House Speaker Mike Johnson is planning to force a vote on the floor of the House later today.

CNN's Chief Congressional Correspondent Manu Raju is up on Capitol Hill, as he always is. Manu, does the speaker have the votes?

RAJU: Not at the moment, Wolf. And, remember, in any party line vote, the speaker can only lose, afford to lose three Republican votes. And right now, there are far more than three who are threatening to vote against this plan.

Remember, this is supposed to be the easy part in trying to move the Trump agenda. Both the House and the Senate have to agree to identical budget blueprints, that it lays out the broad parameters of the fiscal goals of their legislation. And then once they approve that in the House of the Senate, then they can actually draft the exact legislative details on issues dealing with a major overhaul of the tax code, new immigration enforcement measures, energy provisions as well.

But the rub is spending cuts. House's Initial plan calls for about $1.5 trillion in spending cuts. The Senate had a different plan. They actually wanted to give themselves more flexibility. They called for at least $4 billion in spending cuts. So, you can see the major difference between the two chambers.

And that has led some major concerns among some of the hardliners in the House GOP who are now threatening to vote against this plan.

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RAJU: This budget, are you a hard no on it?

REP. RALPH NORMAN (R-SC): I've got to see the proof. It's all about math. We got an arithmetic problem. $4 billion versus $2 trillion is a little bit of difference. That's what we're trying to do.

RAJU: So, do you think the Senate plan just does not add up?

NORMAN: Why didn't they put it in there? Give us some assurances.

REP. RICH MCCORMICK (R-GA): There's a lot of mistrust in that process right now, so we're trying to work through that right now with a bunch of members.

UNIDENTIFIED MALE: I am a no on this bill as it stands.

(END VIDEO CLIP)

RAJU: But the pressure is on. Donald Trump had a number of those Republican holdouts in the House over to the White House yesterday trying to urge them to move along with this. He called some of them out last night in a Republican dinner as well, and the speaker himself wants to have this vote today. They don't want to change this plan, Wolf, because doing so could delay this process even further.

And remember, again, this is the easy part. They have to just simply agree to the broad parameters and then actually draft the legislation, which is going to be much more difficult in the months ahead, but they have to do all this in order to enact that sweeping agenda. But can they get there?

At the moment, there's a high hurdle for the speaker to clear. The speaker is gambling that they can put this on the floor, flip those holdouts, put pressure on those members to advance this promises with promises for future cuts later. But big question about whether they can get that done.

BLITZER: Yes, the clock is ticking obviously in the meantime. Manu Raju up on Capitol Hill, thank you very much.

There's also a new reporting coming into The Situation Room. The acting IRS Chief is stepping down just a week before tax day. She joined the agency back in 2021 under President Biden and took over in an acting capacity this year. It comes after the IRS reached a controversial data-sharing deal with the Department of Homeland Security that would provide taxpayer information to immigration officials.

CNN's Rene Marsh is here with us in The Situation Room. So, these resignations, how are they going to impact the IRS especially coming up to this very, very busy tax season?

RENE MARSH, CNN CORRESPONDENT: Yes, we're just days away from tax day and there is upheaval within the IRS. We'll get to that in a second. But, really, Wolf, I want to just punctuate just how shocking this was for people within the IRS. Many people didn't see this coming. This is the third head of the IRS commissioner who is leaving the agency just this year alone.

Many within the agency has had seen Melanie Krause as someone who was in line with the Trump administration.

[10:15:04]

They didn't feel like she pushed back enough. But yesterday, sources tell me that Melanie Krause, IRS's acting commissioner, who had only been in this role since February, was going to be departing in part because of that data-sharing deal that you mentioned.

And on Monday, the IRS and DHS, they finalized this agreement that would provide this sensitive taxpayer data that would enable ICE to locate and deport undocumented immigrants. And many within the agency, this agreement did not sit right with them. They thought that it was in violation of many of the privacy laws that dictate how this sort of data should be handled.

But the large story here is, as you mentioned up top, we are days away from tax day. The IRS is in a state of turmoil. I mean, it's not just Melanie Krause, who's the acting head of the agency, but it is also the chief of staff of the IRS who resigned on Friday. The chief privacy officer will resign. She made that note yesterday. The chief financial officer will resign. The chief risk officer will resign. And the chief information officer will resign. All of those people announcing that they're leaving this agency at this critical time within less than a week.

And then there's a component of the data-sharing, many undocumented immigrants who had been paying their taxes here. They pay billions of dollars in taxes. Many of them uncertain about whether that's in their best in interest anymore. Keep in mind, Wolf, that the IRS funds virtually everything in this country, from safe roads to safe planes. And so there -- as far as what the impact could be, it could be, as far as the undocumented immigrant population, a lower revenue. And we'll eventually see that as far as services goes throughout.

BLITZER: It's extraordinary what's going on at the IRS right now.

All right, Rene, thank you very, very much. Pamela?

BROWN: That's really to point out, it could impact all of us.

Happening now, devastating floods are wreaking havoc this morning across Kentucky. After days of heavy rain, there is historic flooding along the Kentucky River in Frankfort. Look at these images right here. This is the Buffalo Trace Distilleries just submerged in the floodwaters and right as people need potentially lifesaving information, there could be another hurdle. The National Weather Service is no longer providing translations of urgent weather alerts for non-English speakers.

Brian Todd joins us now. Why is this happening? Brian?

BRIAN TODD, CNN CORRESPONDENT: No real explanation of why it's happening. Pamela, other than the National Weather Service says they're pausing this because the contract with the provider has expired. But you guys will remember a little more than a month ago, we reported that President Trump had signed an executive order designating English as the official language of the U.S. We reported at the time that could mean that some translation services may no longer be available for speakers of other languages on government websites. Well, now we know from new reporting from the Associated Press, the National Weather Service no longer providing language translations of its products.

Now, this could have, according to experts, some pretty dire consequences at maybe the worst possible moments. You remember those tornadoes in your home state. In 2021, deadly. I was there. You were there. According to a gentleman named Joseph Trujillo Falcon (ph), he's a researcher at the University of Illinois Urbana Champagne. He's worked with NOAA on researching how to translate weather and climate information to the public. He said there was a Spanish-speaking family in that area at the time of those tornadoes. In 2021, they got an alert about the tornadoes coming in English on their cell phones, but because they couldn't understand it, they ignored it. Then an alert came to them in Spanish and they got it and they got to shelter just in time, and he said it saved their lives.

Now, that could be, you know, a fallout effect if they don't offer these translation services in Spanish and other languages. Let's see how long this lasts and if it has any of those real world consequences.

Yes, but you remember that those tornadoes, well, more than 50 people died. This Spanish-speaking family could have really had some injuries or possible deaths if they hadn't gotten that alert in Spanish. Are people going to get these alerts in other languages now and for how long will this go on? That's the question.

BROWN: That's the question. Because if they don't, as you lay out there with that one example, it literally could be life or death. TODD: Devastating. They got it just in time in Spanish, and maybe that's not coming this time.

BROWN: Yes, exactly. Brian Todd, very important reporting, thank you. Wolf?

BLITZER: Pamela, still ahead, Canada's counter-tariffs on some U.S. vehicles are now in effect, adding yet another layer to the already icy relationship with our neighbors through the north. We'll speak to the former premier of Quebec.

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

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BLITZER: We're following yet another wild day in President Trump's trade war as China and the European Union unveil retaliatory tariffs against the United States. The tit-for-tat expected to spike prices on everything, from clothing to groceries.

Joining us now, Democratic Congressman Jared Moskowitz of Florida. Congressman, thanks so much for joining us. What impact is this escalating trade war having on your district down in Florida?

REP. JARED MOSKOWITZ (D-FL): Well, good morning Wolf. It's good to be with you. But, yes, we are in an active trade war, both with China and Europe. I mean, many people obviously talked about what President Trump wanted to accomplish, which was to take America backwards. We didn't know we'd go 10,000 years to bring back the dire wolf and go back to the tax policy of 1930. This is going to be the largest tax hike on the American people, Wolf. I don't know if it's too early for one of your Wolf spritzers (ph), but a lot of people are very worried about what's happening to their 401(k)s, their pensions, their retirements and their businesses.

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And my colleagues, my Republican colleagues on the house are silent. President Trump has the wheel and there are absolutely no breaks on what is coming with the largest tax increase to the American people based on this tariff war.

BLITZER: The Trump administration, Congressman, says, multiple, there was multiple foreign countries are coming to the negotiating table. Is it possible the president's strategy could work out in the long run, even if it means some serious short-term pain?

MOSKOWITZ: Well, let me say this, okay? I think at the end of the day that we should be fixing our supply chain. As the former director of emergency management, I saw during COVID the breaks of our supply chain.

I do think we should be onshoring some of these jobs back to America, but the execution of this is totally chaotic and a disaster. We didn't have to tariff the whole world at the same time. We could have focused on China and then some other areas.

Now, the problem is the whole world is coming with meetings, and you can't take these meetings fast enough. You can't make all of these deals fast enough. And so we're going to feel the pain. I don't remember any time the president standing at the podium saying that he was going to take 7,000 points off of the stock market, tens of trillions of dollars wiping out from the economy in order to accomplish that goal. That's what people have a problem with. It's not necessarily the idea of onshoring jobs back. It is the method, it is the execution.

But also the mixed messaging from the White House has been disastrous. They've talked about people making -- you know, putting in these tiny screws into iPhones or there'll be plenty of jobs for robots. I didn't know there was a robot union, but now we know. I mean, the problem is there's no direction. It's completely unclear, and that's why you even see Elon Musk taking shots at the mastermind of all of this, Peter Navarro.

BLITZER: Yes, those shots have been serious. So, right now, Congressman, most Republicans are at least willing to give Trump a chance to carry out his trade strategy. How bad will things have to get before Republicans where you are in the House change course?

MOSKOWITZ: Oh, well, if I don't -- I mean, we're testing that theory. I mean, remember when Donald Trump said he could shoot someone in Fifth Avenue and get away with it? Boy, was he right. I mean, you know, again, 7,000 points off the stock market. If Joe Biden had wiped out 7,000 points on the stock market, we'd be in the middle of impeachment hearings if the Republicans had the House and the Senate.

And so, you know, look, I don't know, is the number 35, 32, 29. I don't know where that floor is for the market or Republicans to grow a backbone, but they are definitely more scared of Donald Trump than they are of their own constituents.

BLITZER: Polling, as you know, a national polling shows approval of your Democratic Party at an all-time low right now. Do Democrats have enough credibility with voters out there to make the case against Trump's economic strategy?

MOSKOWITZ: I think we do if we stay focused. I mean, the problem is, you know, because Trump is so good at creating chaos and throwing so many things at the wall, we can't be like squirrels trying to attack all of them. We got to stay focused with a very singular message. And right now that message is tariffs and the stock market and the cuts to Medicare, Medicaid and Social Security. That has to be the focus. We all need to be singing from the same sheet of music.

But, obviously, you know, we have to earn some of that trust back from voters. We got to make sure that we're on the right side of these 80- 20 issues that are out there, that are a distraction from the bigger things, like, you know, this large tax increase and the cuts to Medicaid but we have to be in sync and in line with the American people on those 80-20 issues.

BLITZER: Congressman Jared Moskowitz of Florida, thanks, as usual, for joining us.

MOSKOWITZ: Thanks, Wolf.

BROWN: And up next, harsh words from Canada's prime minister saying that President Trump's tariffs are driving the U.S. into a recession.

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