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The Situation Room

Tariffs on Semiconductor and Pharmaceutical; Tariff Exemptions on Electronics, Smartphones are Temporary; Hearing Today for Kilmar Abrego Garcia. Aired 10:30-11a ET

Aired April 15, 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]

SHIRA SCHEINDLIN, FORMER UNITED STATES DISTRICT COURT JUDGE: No, it's not. And what Harvard has to do is what the law firms have done that are resisting Trump's orders. It will have to become the plaintiff in court. It will have to go to court and ask for an injunction, try to stop this order and take it through the court system because it is not constitutional to lose its tax exempt status.

Yes, it could. Federal funds can be withheld by federal employees, that's for sure. So, sooner or later, that can be done. But it is inappropriate to talk about taking away its tax status, tax exempt status. I don't see that. But Harvard has taken a position that I think it had to take because it's faculty very much, 800 faculty members, I'm told, urged the university to stand up and fight this clearly unconstitutional order, as are the unconstitutional orders directed to the law firms.

WOLF BLITZER, CNN ANCHOR: Judge Shira Scheindlin, thank you so much for joining us.

SCHEINDLIN: Thank you.

PAMELA BROWN, CNN ANCHOR: Thank you so much, Judge. And up next semiconductor and pharmaceutical tariffs are the next on deck. We're taking a closer look at what this could mean for prices for your next phone or prescription refill.

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[10:35:00]

BROWN: Turning now to the latest chapter of President Trump's trade war. We are learning. The Trump administration is kicking off investigations into imports of pharmaceuticals and semiconductors as it looks to set the stage for new tariffs on those key industries. And it comes as the president is signaling possible relief for another vital industry, auto manufacturing.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: I am looking at something to help some of the car companies where they're switching to parts that were made in Canada, Mexico, and other places. And they need a little bit of time because they're going to make them here, but they need a little bit of time. So, I'm talking about things like that.

(END VIDEO CLIP)

BROWN: Joining us now for more is Moody's analytics chief economist, Mark Zandi. So, Mark, how big of an impact could a potential rollback on these auto tariffs have?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, Pamela, it's hard to know because, you know, not a lot of specificity there. And, you know, even when the president does roll back tariffs, sometimes the language is so opaque, it's very, very difficult for the folks in the business to really take advantage of it.

Take the auto import parts tariffs, the president gave some relief if they were. U.S. contents, they're produced in the U.S. but a lot of the automakers can't quite figure out, you know, how to implement that and what to do with it. So, you know, it's just part of all the drama around the tariffs on-again, off-again, which products, which countries are very difficult to discern. So, hard to answer your question because there's just not a lot of -- you have to be explicit and it's not explicit.

BROWN: Right. Because these companies have to plan and they need facts and specificity to plan. You have many key industries, including auto manufacturing that rely heavily on the semiconductors. Where could we see the most outsize impact of a new round of tariffs?

ZANDI: Well, you're talking about the chips. Again, that depends on how high the tariffs are and how broadly they're imposed. You know, no specificity there either. But there's been a discussion around the 25 percent tariff, and that would be consistent with the tariffs on auto, steel, and aluminum.

So, let's say it's 25 percent, you know, I expect a lot of that to get passed through to the end user. So -- and of course, chips are used in lots of different things, from cell phones, to cars, to appliances, to consumer electronics. So, that just means higher costs for those businesses and they'll have to pass that through. If they can't pass that through because of perhaps weak demand or other conditions, that means they will suffer lower profitability and that'll affect their willingness and ability to hire and invest and to grow.

So, you know, one way or the other, the higher tariffs are going to either result in higher prices for us as consumers, or fewer jobs because of a weaker economy.

BROWN: You predicted that we are headed for a recession in another three to four weeks. What makes you certain of this timeline?

ZANDI: Well, I'm not certain about anything for sure. I mean, president could take an off ramp here, right? I mean, that would be great. You know, and he's -- there's been some signs of some backtracking on certain of the tariffs and that could continue and the work could de-escalate and, you know, we could navigate through without an economic downturn. But if we continue down the current path of higher tariffs and more uncertainty and no specificity and more opacity, then yes, I think in the next few weeks, three, four, five weeks I think it's going to be too much to bear for businesses and consumers and investors and, you know, as you know, those folks are already on edge. Sentiment has been hit hard by all of this. Stock prices are down. Interest rates are up. So, we're already very fragile. So, I don't think it'll take much more to push us into an economic downturn. So, I think, recession risks are just uncomfortably high and moving higher with each day.

BROWN: And we know the administration says, look, part of why we're doing this, a big reason is to bring jobs back to the U.S., these manufacturing jobs. How does that square with the reality that these tariffs could lead to layoffs, could hurt other sectors like the service industry, and the fact that there are manufacturing jobs open right now that companies can't fill?

[10:40:00]

ZANDI: Yes, I just don't see it. You know, I don't think foreign businesses or even domestic companies will expand operations here just because of the -- again, the uncertainty around these tariffs. You know, when you make an investment, those investments take a long time to come to fruition. To build a vehicle manufacturing plant, for example, can take three, four, five years, and then that plant's going to be an operation for a decade or two after that. And the question you have to ask if you're trying to make that decision of whether to invest or not is, what are the tariffs going to be? And how do you know? I mean, how do you know what the tariffs are going to be three days from now, let alone three years from now? So, I just don't see that.

And the other thing, Pamela, I just point out, unfortunately, we're not talking about a lot of jobs. You know, it's all -- manufacturing in the United States accounts for, what, 8, 9 percent of total employment. So, even if it was highly successful, and again, the tariff of policies were highly successful, and again, I don't think that'll be the case, but let's just assume that it is, we're not talking millions of jobs, we're not talking hundreds of thousands of jobs, we may be talking tens of thousands of jobs, thousands of jobs.

You know, a lot of these manufacturing facilities are highly mechanized, robotic, they don't employ a lot of folks. So, I'm just perplexed by, you know, the idea that this is going to lead to, you know, significant amount of job creation in the United States.

BROWN: Mark Zandi, as always, thank you. Wolf.

BLITZER: Thanks, Pamela. Just ahead, China's president is making its case to other nations states -- to other Asian nations hit by President Trump's tariffs. Could the president's plan actually end up backfiring and work in China's favor? We'll discuss that and more with Democratic Congressman Ritchie Torres of New York. That's next.

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[10:45:00]

BLITZER: Today, a federal judge will hear arguments in the case of Kilmar Abrego Garcia, the Maryland man mistakenly deported to a notorious El Salvador prison. For now, President Trump is brushing off a U.S. Supreme Court order to, quote, "facilitate" his return to the United States.

Joining us now, the New York Democratic congressman, Ritchie Torres. Congressman, thanks so much for joining us. I know you are introducing a bill that would require the U.S. to secure the return of mistakenly deported individuals. Why is this necessary and will you have any Republican support?

REP. RITCHIE TORRES (D-NY), FINANCIAL SERVICES COMMITTEE: Well, I'm skeptical that we will have Republican support because the Republican Party is fully captive to Donald Trump. But of all the abuses of Donald Trump's presidency, there's no greater threat to liberty than his complete contempt for due process. You know, without due process, what stops Donald Trump from wrongfully labeling any American as a non-citizen gang member and abducting them in the dead of night and rendering them to a foreign prison to be tortured?

You know, Donald Trump's actions set a dangerous precedent for our democracy. And so, I'm introducing legislation known as the Rescue Act, which would seek to secure the release of those who have been wrongfully deported. You know, if there is a foreign leader, like the president of El Salvador, who refuses to comply with an order from a federal court to release someone who's been wrongfully deported, there should be geopolitical consequences, and those consequences should be swift and severe, it should include the suspension of relations with the United States and the termination of foreign assistance.

BLITZER: Congressman, if you can't pass this legislation with veto proof -- with a veto proof majority, what else, if anything, can Democrats in Congress do about the president clearly pushing the limits of his power in this way? He even suggested yesterday the possibility of starting to deport American citizens who commit crimes.

TORRES: Look, we have to exhaust every means of holding Donald Trump accountable. You know, whether it's mobilization on the streets, legislation in the halls of Congress, litigation in the courtroom, you know, we have to throw the kitchen sink and hold Donald Trump accountable. But as far as I'm concerned, the imperial presidency of Donald Trump is as much a product of congressional capitulation as it is of Trump himself.

You know, historically, Congress has gone too far in passing too many laws that have concentrated power in the executive. You know, we should repeal the Alien Enemies Act, which enables the president to deport people without due process. We should repeal the International Emergency Economic Powers Act, which has enabled the president to set tariffs that have destabilized the global economy. We need to return power back to where it belongs, which is the United States Congress. The Constitution envisions Congress as the Article 1 branch.

BLITZER: I want to turn, Congressman, while I have you to some economic news. The Fed is now signaling it won't be cutting interest rates amid Trump's trade war. And now, we're learning that the White House is actively looking for looking for Fed Chair Jerome Powell's replacement. Do you have any concern that Trump will try to fire Powell before his term ends next year?

TORRES: Look, Donald Trump has no regard for the independence of any institution, including the Federal Reserve. And if he wages a frontal assault on the independence of the Federal Reserve, it's going to send shockwaves through the global economy.

Our economy has no greater uncertainty -- or no greater enemy than uncertainty. You know, if you're a business or an investor, why would you invest in the United States if Donald Trump can radically rewrite the rules in the middle of the game? The only certainty under Donald Trump is uncertainty, and it's doing irreparable damage to the U.S. economy.

[10:50:00]

BLITZER: Virtually every economist that believes these tariffs that Trump has imposed that will eventually raise prices for consumers across the board. What are you hearing from your Republican colleagues about that? And are they willing, do you believe, to do anything to push back against these tariffs?

TORRES: Look, I mean, Republicans will privately express concerns about the tariffs, but the number of Republicans who are willing to speak out against Donald Trump and defend free trade are vanishingly small. I mean, the Republican Party has become a cult of personality around Donald Trump and his tariff regime is doing an enormous amount of damage to an enormous number of businesses and families in America. And he's sabotaging the American economy to the benefit of China.

And even though he's promising to revive manufacturing here in America, his policies are producing the exact opposite. You know, half of all foreign imports in the United States are inputs that support American manufacturing. And when you tax those inputs, as Donald Trump is doing, you're not strengthening American manufacturing, you're weakening it.

BLITZER: And you're in the process, you're making a lot of products, including food, so much more expensive for average Americans out there. Congressman Ritchie Torres, thanks so much for joining us.

TORRES: Absolutely.

BLITZER: And we'll be right back.

(COMMERCIAL BREAK)

[10:55:00]

BROWN: College basketball superstar Paige Beuckers is headed to the WNBA. Beuckers led UConn to the NCAA Championship just this month.

BLITZER: And joining us now CNN Sports Anchor Coy Wire. Coy, Paige Beuckers has really set college basketball on fire this season. She was so impressive.

COY WIRE, CNN SPORTS ANCHOR: She is. She's the type of person you build your franchise around. Her head coach, Geno Auriemma, there at UConn called her, she says she flows like water. She started her career by becoming the first ever freshman to win National Player of the Year. She missed all of last season after tearing her ACL, but she persevered, worked harder than ever and finished her career as a national champ.

And check out the watch party back in Dallas. You think those fans are excited? This is when Beuckers was selected, number one overall by the wings. Here she is.

(BEGIN VIDEO CLIP)

PAIGE BEUCKERS, WNBA NUMBER 1 OVERALL PICK: Obviously, you got a little bit emotional there just talking about my teammates and what they mean to me, but just so much gratitude, so much appreciation for the journey that it took to get here and the people that it took to get here. So, just rewarding their hard work and all of my hard work, I guess. It's very gratifying.

(END VIDEO CLIP)

WIRE: Now, the Seattle Storm selected the six-foot-six teen phenom out of France Dominique Malonga with the second pick. Just 19 years old, Wolf and Pam, but she started playing as a pro overseas at 15. She won an Olympic silver medal in Paris and she dunks with ease. Tony Parker, the legendary NBA player, said that she's like, Victor Wembanyama. I cannot wait to watch her play.

And good news for your Mystics there in Washington. They had three picks in yesterday's first round. All of them within the top six. So, your Mystics got some serious juice coming their way.

BLITZER: Happy for our Washington Mystics.

BROWN: I know you are. You're a big fan. All right. Coy Wire, thanks so much.

WIRE: You got it.

BROWN: We'll be right back.

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