Return to Transcripts main page

The Situation Room

Any Moment, House Votes on Key Budget Blueprint; Today, China Imposes Retaliatory Tariffs of 84 Percent on U.S. Goods; U.S. Inflation Cools to Six-Month Low in March. Aired 10-10:30a ET

Aired April 10, 2025 - 10:00   ET

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

[10:00:00]

PAMELA BROWN, CNN ANCHOR: Happening now, breaking news, any moment the House will vote to move forward a key part of President Trump's agenda. Mike Johnson confident he has the votes, but with more than a dozen holdouts, what concessions had to be made?

WOLF BLITZER, CNN ANCHOR: And Chinese trade war. Next hour, the president's top officials will meet to talk about how to deal with Beijing.

We want to welcome our viewers here in the United States and around the world. I'm Wolf Blitzer along with Pamela Brown, and you're in The Situation room.

And we begin with the breaking news up on Capitol Hill. The House of Representatives is expected to vote on the Senate's budget blueprint any moment now.

BROWN: Speaker Mike Johnson delayed the vote late last night after failing to get enough Republican support. He's up against a fast approaching deadline with lawmakers set to leave for a two-week recess. But last hour, he seemed optimistic.

(BEGIN VIDEO CLIP)

REP. MIKE JOHNSON (R-LA): I'm happy to tell you that this morning I believe we had the votes to finally adopt the budget resolution so we can move forward on President Trump's very important agenda for the American people.

(END VIDEO CLIP)

BLITZER: I want to go live right now to our Chief Congressional Correspondent Manu Raju up on Capitol Hill. Manu does the speaker have the votes?

REP. TIM BURCHETT (R-TN): I got to hear it from the speaker's mouth and that's what I'm --

MANU RAJU, CNN ANCHOR AND CHIEF CONGRESSIONAL CORRESPONDENT: But you don't going to -- okay. All right, thank you.

All right, hey, Wolf. I was just talking to Congressman Tim Burchett of Tennessee right there. He is one of those holdouts that have threatened to vote against this plan, and he just told me moments ago he is not sure if he's a yes at this moment. He's trying to get some more assurances from the speaker.

What are those assurances, Wolf, has really been holding up this effort since last night, the speaker wanted to have passed this budget blueprint last night, je had to punt it because of opposition from members like Congressman Tim Burchett of Tennessee, those concerns that the spending cuts were not deep enough in this budget blueprint.

Remember when the first plan that was advanced by this Republican-led House, it included about roughly $1.5 trillion in spending cuts. Then this went over to the Senate. The Senate changed that plan. They changed it to give themselves more flexibility and how to ultimately cut spending. They only included $4 billion worth of spending cuts, and that has led to a revolt on the right flank of the House GOP, as they threatened to scuttle this effort all together.

And this is why this is so significant, Wolf. The House and the Senate need to agree on one identical budget blueprint in order to advance the larger Trump agenda. Then they can actually draft the details of the legislation, not just includes spending cuts. Also the details including a massive overhaul of the United States Tax Code, which will affect taxpayers across the United States, also including new immigration enforcement measures, also energy projects also will be part of this large proposal, but they need to pass the budget blueprint first.

This is supposed to be the easy part. Get it through -- get this over the finish line, and then the details, the real complications of the legislative process would come forward. They're using this process too, Wolf, because they can pass it in the Senate along straight party lines, meaning that Democrats will not be needed only if they can first pass the budget blueprint, which is why today's vote, if it happens this hour as the speaker is trying to get it through the finish line, is so significant. We'll see if they get there.

The speaker could only afford to lose three Republican votes on any straight party line vote. And last night there were more than a dozen who were objecting, roughly 17 or so meeting with the speaker, as the speaker worked them over, tried to get the votes, trying to get this over the finish line today, Wolf.

BLITZER: And normally and historically, a speaker won't allow a vote on an important piece of legislation to come up unless the speaker is guaranteed success that it will pass, right?

RAJU: That is usually the case, Wolf. There has been some line of thinking in the House GOP leadership quarters that perhaps they could put this on the floor of the House and threaten, essentially dare these Republicans to sink this measure, and if they sink it, then endure the wrath of Donald Trump in the aftermath of that, let Donald Trump call out these members by name, try to get them ultimately to buckle if they were to go that route. But that is a big risk. So, once those members class their votes, they're almost locked into that position. So, that's why you're right. Usually, the speaker will only go to the floor if he knows he has the votes.

[10:05:01]

The speaker projecting some confidence today, but given the narrowness of the majority, you really never know until you cast a vote. And as you heard from that one congressman I just spoke to Tim Burchett, he still doesn't know if he's a yes. The speaker hopes he can flip him in this upcoming meeting, Wolf.

BLITZER: And that roll call is coming up soon, right?

RAJU: Roll call, we expected this hour. It, in fact, is expected to be the beginning of this vote series that is expected to begin any minute. But the way the House operates, Wolf, sometimes they push this back. Sometimes they'll actually have it later.

Yesterday, the speaker kept open one vote prior to this vote for more than an hour, actually 80 minutes, as he was working behind the scenes to try to pressure these members to fall in line. Ultimately, he punted on it. So, things are very fluid, especially when he does not know if he has the votes. Perhaps it could get delayed. But they are still hoping that they can get this passed here this hour. Wolf?

BLITZER: All right. We'll watch it together with you, Manu Raju up on Capitol Hill. Pamela?

BROWN: Yes, fluid, keyword there.

All right, we have some more breaking news coming in this morning. The European Union backing off its retaliatory tariffs on U.S. goods on this morning after President Trump hit the pause button though we should note there's still those 10 percent across the board tariffs he did not pull back on. Whiplash, Americans want to know will everyday prices still climb and are there nest eggs still under siege.

Right now, this right here is how U.S. markets are responding just an hour before President Trump meets with his cabinet. Also this morning, China's brand new tariffs kick in. That's 84 percent on all U.S. goods coming into the country. The president's adviser is urging Americans to be patient to allow for negotiations.

(BEGIN VIDEO CLIP)

KEVIN HASSETT, DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: President Trump has a strong relationship with President Xi. They've had conversations in the past that have been very productive. Those conversations haven't begun yet. When they begin, I think, is a decision that President Trump will decide. And I don't have any clarity on whether that's going to be soon or later. But I know that the president has had a lot of progress, made a lot of progress in the past by speaking directly with President Xi.

(END VIDEO CLIP) BROWN: All right. Let's go live now to CNN Business Editor-at-Large Richard Quest in New York. So, Richard, we just got new numbers in on U.S. inflation, and we should note, it shows back in March it was cooling to a six-month low. Of course, this was before the president had his, quote, liberation day. What do you read into these numbers?

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Well, obviously, the numbers are going -- excuse me, the numbers are going in absolutely the right direction. This is what the Fed wants to see. That is CPI. The Fed's also looking at price inflation, but it's the reason why it's coming down. It's coming down because the economy is slowing. Demand is weakening. Consumers, even before all of this tariff business, consumers were worried because of what they were seeing happening in the economy with things like the federal government.

So, whilst it most certainly is encouraging, and, yes, it will give the Fed wiggle room to lower interest rates because inflation is coming down to target the federal balance that against the higher inflation from the 10 percent general tariff that's now in force and the higher tariff rate that's now enforced on China. So, yes, it is good news. It is in the right direction, but it is also a warning, bell canary (ph), if you will, that things are perhaps slowing down a little faster than they'd like.

BROWN: Yes. And on that note, it struck me that JPMorgan Chase didn't change its recession forecast. And it said in its analysis that it views what's happening right now in this pause as sort of the end of the beginning, not the beginning of the end. What do you think about that?

QUEST: I mean, that is it in a nutshell. Because you've still got the auto tariffs, you've still got the steel tariffs, you've got the 10 percent across the board, which is, just bear in mind, 10 percent doesn't sound much compared to 50, 60, 70 percent, but 10 percent is triple what the U.S. average tariff was at 2.5. So, you've got all the tariffs stuff that's in the pipeline that's happening now along with 125 percent on China.

The E.U.'s decision, by the way, the E.U.'s decision to pause, interesting, but it's not -- but that's about tariffs that have already come in. That's about steel. What I find fascinating is, if I'm right, China has not responded to the last 24 percent that Donald Trump did yesterday. The 84 percent was part of the earlier stuff. So, there is movement of the Chinese and the United States, I think, edging closer together.

Back to the markets, can we just look at the markets briefly just for one second while I just put that back in? Give me the triple stack, if you will, and you'll see what this is reflecting is the fact that nothing's changed, that you had an inflation number because the economy's weakening, you've got all this tariff action in the pipeline and you've got three months of uncertainty ahead. And that's why yesterday was a classic relief rally, if you will, a reprieve rally, but the sword of Damocles is still there and the markets are telling you that today. BROWN: Certainly, they're sending that signal today. And I want to get your response to what the treasury secretary, Scott Bessent, said. He was asked if the pause was in response to us and global markets tanking. Well, he says that the pause was part of the strategy all along. Let's listen.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, TREASURY SECRETARY: We've had more than 75 countries contact us, and I imagine after today, there will be more. So, it is just a processing problem. Each one of these solutions is going to be bespoke. It is going to take some time. And President Trump wants to be personally involved. So, that's why we're getting the 90-day pause.

(END VIDEO CLIP)

BROWN: President Trump, I believe -- go ahead, Richard. You just take it away.

QUEST: Sorry. I shall spare the treasury secretary his embarrassment and preserve his dignity. No. The markets had told him business leaders were calling the White House. The president was aware that people were queasy and getting yippy, whatever that might mean. No, they had no intention of doing that, in my view. This was because of they realized it was time to pull back before there was really very nasty accident, more than it was already there. But we'll let the administration spin it as they wish.

BROWN: Yes. I mean, clearly, that was spin because then after President Trump admitted, right, he said, yes, the bond market, he was watching that. And, you know, he saw that people were getting spooked and that was a big red alarm right there.

Richard Quest, thank you so much.

QUEST: Sure, always.

BLITZER: And, Pamela, the markets have been opened here in the United States for a little bit more than 40 minutes or so. The Dow Jones, we can already, see is down almost a thousand points already. We're watching this closely. China's calling on the United States at the same time for what they call mutual respected equality in order to discuss this escalating trade war. As of now, neither side appears to be backing down.

I want to go live to our CNN Correspondent Marc Stewart, who's joining us in Beijing. Marc, today, China has imposed its retaliatory tariffs of 84 percent on all U.S. goods imported into China. What are you hearing from the government there?

MARC STEWART, CNN CORRESPONDENT: Right, Wolf. And at this moment we are seeing a number of signs that suggest Beijing may be in it in the long haul, in this U.S.-China trade war, some very symbolic yet simple moves.

So, for example, the National Film Administration announced today that it would start to restrict some American films from being shown to Chinese audiences. We heard a warning from the government, warnings, I should say, issued from the government to Chinese tourists and to Chinese students who may be heading overseas to be careful of their safety, very symbolic moves.

As far as though the official language that we're hearing from the Chinese government, it's still this mix of diplomacy yet very defiant. In fact, we heard from the Ministry of Commerce today that talked about the fact that it would open the door for talks, but would fight back if needed.

Finally, we should point out that even though the U.S. commerce secretary, Howard Lutnick, talked about the need or talked about a possible phone call between President Trump and Xi Jinping, that's not something we're getting any kind of immediate reaction to from here in Beijing. In fact, China really prefers behind the scenes backdoor conversations as opposed to something more face-to-face, Wolf.

BLITZER: All right. Marc Stewart reporting from Beijing, thank you very much.

It's interesting, Pamela, China has always been a recipient of a lot of major American motion pictures, a big source of revenue for Hollywood. And if that drops down now, that's going to be a big loss for those studios out in Hollywood.

BROWN: Absolutely. And we also should know we have a soybean farmer coming up on the show from Kentucky, and we're going to talk about how this trade war with China also impacts him directly.

We also have some more news, Wolf, breaking overnight. A Russian- American ballerina who was imprisoned in Russia for treason is now free. Secretary of State Marco Rubio says Ksenia Karelina is on her way back to the United States. She was sentenced to 12 years in a Russian prison last August after donating a little more than $50,000 to a charity supporting Ukraine.

Her release part of a prisoner swap between the U.S. and Russia. And Russia is getting Arthur Petrov in exchange for this. He was being held in the U.S. on charges including smuggling wire fraud and money laundering. That's according to Russian state news agencies.

CNN International Diplomatic Editor Nic Robertson is with us live from London now. So, Nic, what can you tell us about how this swap came to be and how it plays into diplomatic talks underway in Istanbul between the U.S. and Russia?

[10:15:02]

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes. I think it really shocked a lot of people when Ksenia was jailed for treason for just donating barely $50 to a Ukrainian charity. And the guy she's being -- Petrov, the guy she's being exchanged with, is a guy who's been supplying high tech weapons parts for Russia and its war in Ukraine. So, that's the deal there. But it began, in essence, when Marc Fogel, the American teacher, was released in another prisoner exchange back in February earlier this year. Of course, he was held in Russia on charges of drug smuggling and come into the country, 2021, with about half an ounce of medical marijuana that had been prescribed for him in the United States by a doctor. He was working as a teacher in Russia. They put him in jail. He was exchanged and release.

But after that meeting, President Trump, who saw him right afterwards, worked hard, and this is what we were told, worked to get others released prisoners unjustly held inside of Russia. And that's where this grew.

President Putin's envoy, Kirill Dmitriev, was in Washington just this past weekend. He played a role in moving this current exchange along, and John Ratcliffe, CIA director, was actually there on the ground in. Abu Dhabi where the actual exchange happened, where, you know, they got off their respective planes, got on the planes, taken them home. It plays in, of course, to those diplomatic talks that are going on between U.S. and Russian officials in Istanbul, trying to thaw relations between the two countries further.

BLITZER: Certainly, and I should note she donated $50, just $50, to that charity supporting Ukraine.

Nic Robertson, thank you so much. Wolf?

BLITZER: All right, Pamela. New CNN reporting coming into The Situation Room, President Trump is making good on his campaign vows of retribution and using the U.S. Justice Department to target two of his first term critics. Yesterday, he signed two executive orders directing the Department of Justice to investigate former government officials Chris Krebs and Miles Taylor. And at least when it comes to Taylor, the president made it very, very clear what he thinks the result should be. Listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: I think it's a very important case, and I think he's guilty of treason, if you want to know the truth. But we'll find out.

(END VIDEO CLIP)

BLITZER: All right. Joining us now, CNN National Security Reporter Zachary Cohen, he's here with us in The Situation Room. Did the president specify any alleged wrongdoing by these two men?

ZACHARY COHEN, CNN NATIONAL SECURITY REPORTER: He made some vague claims, as you just heard, accusing Miles Taylor of treason, but not really explaining what he wants Attorney General Pam Bondi to investigate and potentially prosecute as it relates to both of these former Trump officials.

Now, look, when it comes to Miles Taylor, again, Trump taking issue with that 2018 anonymous op-ed. We later learned Taylor was the author of, and the subsequent book that he wrote criticizing Donald Trump and providing a firsthand account into his decision-making, Donald Trump really pointing to that as the source of his displeasure with Taylor.

And with Chris Krebs, it's more about what Krebs said after the 2020 election, Chris Krebs refusing to support Donald Trump's claim that the 2020 election was stolen, ultimately got sideways with the president and fired via tweet. Donald Trump repeating yesterday again that he believes the 2020 election was rigged, but not providing any evidence to support that claim despite having four years to come up with it.

But at the end of the day, Donald Trump using an official White House proclamation to essentially cast both these individuals as subjects of a criminal investigation. It's a really big test for Attorney General Pam Bondi, who has repeatedly insisted she won't let the Justice Department be weaponized and she won't prosecute people based on their political beliefs.

BLITZER: And that op-ed was in The New York Times, very widely read op-ed and indeed caused a big stir at the time. I remember.

All right, Zachary, thanks very, very much. Pamela?

BROWN: Yes. And, you know, we have the First amendment protecting freedom of speech.

All right, so more rain fell overnight on the flood-ravaged Ohio River Valley. River levels are slowly receding after the region was inundated by days of heavy rain last week. But as you can see, look at this, there are still entire neighborhoods underwater.

Let's go live now to CNN Meteorologist Derek Van Dam in the Weather Center. Derek, how long could it take for these neighborhoods to dry out?

DEREK VAN DAM, CNN METEOROLOGIST: Pamela, it will likely take days for the water to fully vacate this hardest hit neighborhood along the Ohio River here in Louisville, Kentucky. And keep in mind, this water still needs to travel downstream, so there are further flood issues that are going to be felt down the line, and I'll show you that in just one moment.

But the rain that fell overnight last night has come to an end in some of these hardest hit areas, but there is more precipitation that will come. Not good news, considering that we have over 25 river gauges that are actually measuring at major flood stage as it stands.

So, this is the chance of severe weather today. Notice the major flood stage river gauges, those shades of purple, the dots of purple, these areas do not need more precipitation. Unfortunately, there is some light rain that will come along with these storms that fire off later this afternoon.

Now, in terms of the forecast going down the line over the days to come, I want to point your direction towards the Mississippi River all the way to the gulf. [10:20:06]

And that purple dot right there, that's Baton Rouge, and they have a forecast major crest. So, Pamela, it isn't flooding in Baton Rouge right now, but as the water travels downstream, it will crest in Baton Rouge in the middle of next week. Pam?

BROWN: All right. We'll be tracking that closely of course. Derek Van Dam, thank you. Wolf?

BLITZER: All right. Still ahead the House speaker, Mike Johnson, remaining hopeful that he has the votes for a key step in passing a budget blueprint. We're live up on Capitol Hill with all the latest development.

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

(COMMERCIAL BREAK)

[10:25:00]

BROWN: And returning now to our breaking news, the House will soon vote on a budget resolution at the top of the hour after Speaker Mike Johnson scrapped last night's vote because he didn't have enough support.

BLITZER: We'll see what happens on that front. I want to get straight to our CNN Congressional Correspondent Lauren Fox. She's, of course, up on Capitol Hill. So, what's the very latest, Lauren?

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Yes. We are watching really closely to see at this press conference this morning where Speaker Mike Johnson and Republican Senate Leader John Thune had this joint statement where they both said that they were committed to getting steep cuts as part of the next part of this process, whether that's going to be enough to really convince some of these conservatives who have been holdouts over the last several days that they can vote for this budget proposal.

I did just talk to one of those members. Representative Eric Burlison, who told me that he wished Thune's comments had been stronger. We expect that Mike Johnson is going to meet with some of these holdouts in the next several minutes just before this vote. It's unclear right now if the votes are there, despite the fact that Johnson was really projecting confidence this morning when he had that statement on cam.

So, it's really a huge question right now if the votes are going to be there. Lawmakers are supposed to be skipping town any day now for a two-week recess. There's a lot of pressure right now for lawmakers to get in line behind the president's agenda. And as has been the case for several weeks, these leaders have been trying to impress upon their members, but this is just the first step. They can have these bigger fights over spending cuts. They can have these bigger fights over tax cuts when they get to actually negotiating the underlying bill. Right now, this is just a blueprint, and yet they are still trying to get the votes. BROWN: All right. We shall see what happens. Lauren Fox, thank you. Wolf?

BLITZER: And up next, we'll be joined by Democratic Congressman Jim Himes on President Trump's pause on most tariffs and what this back and forth could be doing to the U.S. economy.

We'll be right back.

(COMMERCIAL BREAK)

[10:30:00]