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The Situation Room

Interview With State Department Spokesperson Tammy Bruce; Setback in Russia-Ukraine Talks; Trump Backing Down on Tariffs?. Aired 11-11:30a ET

Aired April 23, 2025 - 11:00   ET

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

[11:00:00]

PAMELA BROWN, CNN HOST: Correspondent Vanessa Yurkevich is in New York.

Vanessa, Treasury Chief Scott Bessent spoke just moments ago. What was his overriding message?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, well the treasury secretary speaking at the IMF, he said that there was an opportunity for a big deal with China.

And that is encouraging news for investors on Wall Street. You can see markets holding steady during the entirety of his speech and the Q&A that followed. He did say, though, that he had some -- he did say, though, that he had some criticism for China about their trade practices, essentially saying that the country is in economic troubles.

Listen to more of what he said.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, U.S. TREASURY SECRETARY: China's current economic model is built on exporting its way out of its economic troubles. It's an unsustainable model that is not only harming China, but the entire world. China needs to change. The country knows it needs to change. Everyone knows it needs to change.

And we want to help it change, because we need rebalancing too.

(END VIDEO CLIP)

YURKEVICH: Now, the treasury secretary did not expand on his comments yesterday that he made to investors in private, saying that the trade war with China would de-escalate soon and that it is unsustainable, but he also did not walk anything back.

And that was encouraging for investors on Wall Street. Traders are also holding on to, Pamela, what the president said yesterday about the head of the Federal Reserve, Jerome Powell. There was so much concern about whether or not the president would actually try to go through with removing Jerome Powell. That absolutely rattled markets, but the president saying yesterday in

the Oval Office that he had no plans to terminate Jerome Powell, and markets really continuing that rally coming off of yesterday into today, and encouraged by what the treasury secretary just said, that there is an opportunity for a deal with China.

But he did criticize the country, saying that they need to trade -- change their trade practices, but the U.S. would try to work with them on that, Pamela.

BROWN: Also, we should note Elon Musk told investors yesterday that he plans to focus more on Tesla, rolling back his role from DOGE after a plunge in profits. What can you tell us about that?

YURKEVICH: Yes, so there was a plunge in income for Tesla, 71 percent plunge compared to last year. That is absolutely significant.

This is a company that was posting profits every single quarter. And a lot of people were looking at Elon Musk, thinking that you're spending a lot of time at DOGE and not enough time running your company. So we heard from Elon Musk yesterday, who said that he is planning to spend more time at Tesla.

And look at shares right now, up over 7 percent, as investors are encouraged now that Elon Musk will be back to running his company again. The stock price of Tesla from the high when President Trump was inaugurated fell 50 percent, but, as you can see, investors on Wall Street encouraged that he may be stepping back into that role.

Elon Musk also talking about tariffs, though, saying that he thinks that there should be less tariffs. But, of course, he said that it is up to the president of the United States, Pamela.

BROWN: All right, Vanessa Yurkevich, thanks so much -- Wolf.

WOLF BLITZER, CNN HOST: All right, Pamela, there's more breaking news coming into THE SITUATION ROOM right now.

President Trump's shift in tone on his trade war may have been the result of a warning from some of the country's largest retail companies. CNN has learned that CEOs from Walmart, Target, Home Depot, and Lowe's sent a very blunt message to the president during a meeting in the Oval Office.

CNN's chief national affairs correspondent Jeff Zeleny is here with us in THE SITUATION ROOM.

So what's the message that got through to the president?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Wolf, it's very interesting.

We have all noticed the president's change in tone over the last day or so. I'm told it's the result of a meeting in the Oval Office on Wednesday with those CEOs, who are talking specifically about the warning for the supply chain disruption. And they said that the store shelves in some of America's biggest stores could be empty in the coming weeks.

And I'm told that that is one of the things that got the president's attention on this. And he really has ratcheted back his language against China on tariffs and other matters. And we're also just learning now that the president is actually taking a walk on the North Lawn of the White House. Kind of unusual.

We're told he wants to put a flagpole there. I believe we have video of it. Let's take a look.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Doing $2 trillion a year on trade. Now we're going to be making money, a lot of money. So that's very good.

Every country wants to partake, even countries that have ripped us off for many, many years, China as an example. But it's not just China. European Union, they ripped us off for many, many years. And those days are over. We're going to make a lot of money for our people. We will be able to lower taxes substantially.

And we're going to be proud of ourselves. We're not going to be a laughing stock that got taken advantage of by virtually every country in the world.

[11:05:06]

(CROSSTALK)

QUESTION: We thought you said you were going up to the line for a flag. What was going on?

TRUMP: We're putting up a beautiful, almost 100-foot-tall American flag on this side and another one on the other side, two flags, top of the line.

And they have needed flagpole for 200 years. It was something I have often said. They don't have a flagpole, per se. So we're putting one right where you saw us, and we're putting another one on the other side on top of the mounds. It's going to be two beautiful poles.

(CROSSTALK)

TRUMP: Paid for by Trump.

(CROSSTALK)

QUESTION: When are the flags going to -- when do they...

(CROSSTALK)

TRUMP: They arrive in about a week or so.

(CROSSTALK)

QUESTION: Can you clarify, Mr. President, on China?

(CROSSTALK)

QUESTION: ... tariffs?

TRUMP: Yes, we are going to have a fair deal with China. It's going to be fair.

QUESTION: Are you talking to them actively now?

TRUMP: Actively. Everything's active. Everybody wants to be a part of what we're doing. They know that they can't get away with it any longer, but they're still going to do fine.

And we're going to have a country that you can be proud of, not a laughingstock all over the world for many years. In 1913, they traded to the income tax system. We used to be all tariff. And we had no income tax, and we had the wealthiest country we had proportionately.

From about 1870 to 1913, it was all tariffs. And we did -- we had more money than anybody. They had committees how to spend the money. They had so much money they didn't know how to spend.

Then some brilliant person said, let's go income tax. Let's let the people pay. No, we're going to be able to substantially lower taxes when this is finished.

(CROSSTALK)

TRUMP: Please go ahead.

QUESTION: How does it look in the meantime? Are you considering lowering the tariffs on China while you're negotiating?

TRUMP: It looks good. Yes. No, it looks good. It looks good.

We were losing anywhere from $3 billion to $5 billion a day. Think of it. We're losing billions of dollars a day under Biden and other presidents, frankly. But under Biden, it got really worse. And China got out of control. We're losing a trillion dollars a year, trillion, not a billion, not a million, a trillion.

And now we're going to be making money with everyone, and everyone's going to be happy. But we're going to be -- we're no longer going to be the country that's ripped off by every country in the world. Thank you very much.

(CROSSTALK)

(END VIDEO CLIP)

ZELENY: So, the president doing a familiar refrain there on the reason for tariffs.

And, Pamela and Wolf, you all know this is something the president has long believed in, the idea of tariffs. He said once again the country was better off with tariffs before income taxes. That is an entirely different time in our nation's history, a century ago.

The challenge here for the president is getting these tariffs negotiated. What we're seeing right now is just in real time a difference of advisers giving him a difference of opinion here. He supports the idea of tariffs, but he's been unable to sort of implement them.

So, on China, his softer tone on China also very important. The treasury secretary and others are trying to get him to make a deal with China. He's blinked, in a respect. That's certainly what we're seeing there.

But he was outside the White House looking at a place to put a flagpole. Of course, we know there's a mighty flag on top of the White House, but now apparently there will be one on the North Lawn as well.

BLITZER: He says he's paying for it too out of his money.

ZELENY: That's what he says.

BLITZER: That's what he says.

But he's clearly moving away from the high tariffs that were imposed on China. And that's encouraging the markets.

ZELENY: It certainly seems to be.

I mean, look, that is something. This trade war, we saw really ratcheting up day by day. And we saw the fallout from that. So that's what his advisers, some of them, are trying to steer him back from, also a shift in tone with the chairman of the Federal Reserve, Jerome Powell. He's been talking about wanting to fire him.

That rattled the markets. Now he's saying he has no plans to do so.

BLITZER: And that's encouraging the markets as well.

ZELENY: A course correction, there's no doubt about it.

BROWN: Yes.

BLITZER: He pays attention to the markets, even though he suggests sometimes he doesn't, but he really does.

ZELENY: Right. Sure.

BLITZER: All right, Jeff Zeleny, thank you very much -- Pamela.

BROWN: All right, and still ahead, the State Department spokesperson joins us to discuss the agency's plans for a top-to-bottom overhaul and what that means for U.S. diplomacy.

And CNN's new reporting on Defense Secretary Pete Hegseth's wife and her appearance at key meetings, including with foreign defense officials.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

[11:14:07]

BLITZER: We're tracking yet another setback for peace talks over the war in Ukraine.

The secretary of state, Marco Rubio, is now snubbing a summit in London amid an escalated clash with Kyiv over the future of Russia- occupied Ukrainian territory.

CNN national security correspondent Kylie Atwood is here with us in THE SITUATION ROOM.

What's the reason for the secretary, Marco Rubio, backing out of this critically important meeting?

KYLIE ATWOOD, CNN NATIONAL SECURITY CORRESPONDENT: Well, listen, the State Department is saying it was logistical reasons, but it gives us a very clear indication, Wolf, that the Trump administration isn't expecting a breakthrough out of this meeting with the Ukrainians and with the Brits in London today.

You will remember that they had a conversation with Secretary of State Marco Rubio, with Middle East envoy Steve Witkoff, and with special representative Keith Kellogg for Ukraine and Russia last week. This was supposed to be a follow-up to that conversation. It's now only being led by Keith Kellogg.

[11:15:00]

That downgrading just gives us an indication that, yes, there are conversations that are still happening with the Ukrainians at this point, but it's not an indication that we're facing a breakthrough in the near term here.

The other thing that's really important to recognize is that we have reported on some of the basics in the framework that the United States put on the table with the Ukrainians and the Europeans last week in that meeting.

And one of the things is that the U.S. said that they would recognize Russia's occupation, Russia's control of Crimea. That is something that the Ukrainians obviously have been against for quite some time. Just yesterday, President Zelenskyy said that that would be a nonstarter, there's nothing to talk about with regard to that, so indications from the Ukrainian side that what the U.S. is putting on the table right now just isn't something that they are willing to really get involved in.

Now, you also have to consider that the Trump administration is also saying positive things about where this could go. Vice President Vance was speaking earlier this morning. He said that there's optimism from his standpoint here.

Let's just listen to that.

(BEGIN VIDEO CLIP)

J.D. VANCE, VICE PRESIDENT OF THE UNITED STATES: We're going to see if the Europeans, the Russians and the Ukrainians are ultimately able to get this thing over the finish line. Again, I feel pretty optimistic about it. I think everybody has been negotiating in good faith.

But it's now time, I think, to take, if not the final step, one of the final steps, which is at, a broad level, the parties saying, we're going to stop the killing, we're going to freeze the territorial lines at some level close to where they are today.

(END VIDEO CLIP)

ATWOOD: You will notice he said freeze the territorial lines.

Maybe that's a first step that they can get both sides to agree to here. We will have to watch and see what happens with these talks with the Ukrainians today in London and then later this week with the Russians in Russia.

BLITZER: Very significant moment right now in Ukraine's history. We will see what happens.

Kylie, there's also some other important news coming out of the State Department, as you well know. A potential major shakeup is in the works, as the secretary of state, Marco Rubio, is moving to cut staff and eliminate a lot of critically important offices and consulates in the U.S., around the world.

Tell us what's going on.

ATWOOD: Yes, so the State Department under Marco Rubio has been working on this plan for months now.

They rolled out this proposed framework, a new organizational chart, Wolf, for what the new State Department would look like under Rubio's leadership. And what it would entail is eliminating 132 offices of the more than 700 offices that are currently at the State Department and getting rid of 700 positions.

Now, this framework that has been laid out, this proposal, is only for the presence in Washington, D.C., of the State Department. It is not for the embassies or consulates abroad, though we do expect that the State Department is working on a plan for those posts globally. We will have to watch and see what happens there.

But the really important thing to note here is that the secretary of state feels like the State Department has been ineffective because, in his words, it has been bloated. There are just far too many people who work there. They're working on priorities that were aligned with previous administrations, not the Trump administration.

And they're saying that they're going to work with State Department officials to really put into place the changes that they're looking to. However, this is an extremely aggressive timeline that the State Department is looking to do here.

By July, according to the deputy secretary of state, they want to have all of these changes implemented. That's basically just 2.5 months away. So these are major changes in a very short time frame.

BLITZER: We will see how this unfolds.

Kylie, thank you very, very much -- Pamela.

BROWN: All right, so let's get reaction to all of these developments.

Joining us now is State Department spokesperson Tammy Bruce.

Thank you so much for coming on the show.

So, you have said that Secretary Rubio is skipping these talks due to logistical issues. Can you give us any more specifics on why the secretary will no longer attend?

TAMMY BRUCE, STATE DEPARTMENT SPOKESPERSON: You know, I really will not speak to issues that have landed regarding negotiations or diplomatic discussions.

But he has a tweet out. There's been certainly more discussions in general. We know General Kellogg certainly has been in London. So things are certainly moving on and being discussed. You just had a clip, of course, from the vice president in that regard. So that's the extent to which I will address that.

BROWN: But, just yesterday morning, you did address it on FOX, that you and the secretary were going to London because the administration believes in diplomacy.

If that's the case and if this is such a priority, why cancel the trip? Does it mean the talks are not going in the direction the secretary wants, where you don't think a big breakthrough will happen?

BRUCE: Well, what I also mentioned after the fact in my briefing is that there are logistics. Secretary of State Rubio is one, of course, the busiest diplomats in the world.

And I think that his travel, his meetings, his discussions up to this point, speaks to a complete commitment not just by the secretary, but by the president himself. This has been a first 100 days where looking for a cease-fire, working for it, traveling the world, speaking to all parties, getting all parties to the table, by the way, which had never happened before.

[11:20:12]

Having these discussions at all occurring is a tremendous accomplishment. It clearly continues. And I think that noticing if one plan changes or if a trip is postponed or called off, it does not speak at all to the nature of the commitment of already what's been accomplished and what continues to be worked on.

BROWN: Right. There's no question that there have been more talks and negotiations, that that started under President Trump's pressure.

At the same time, the secretary is canceling this trip to London at a critical time, when both he and the vice president have said that they're willing to walk away from this if there is not progress made. And I think that that is key here.

Does this have anything to do with Zelenskyy rejecting a key part of the U.S. proposal, which is recognizing Russian control over Crimea?

BRUCE: Well, most of what you're asking also relies on speculation, relies on maybe an individual report or rumors or even gossip.

BROWN: What specifically? What specifically?

BRUCE: So, I'm certainly not -- I'm not -- I'm not -- I -- all of what you have said is details regarding what maybe was reported or mused about what maybe was presented, but that's not what we're going to do here.

And that doesn't help the nature of the genuine conversations, the genuine summits, the genuine exchanges between leaders. You have got people certainly in the United States, the president of the United States and the secretary of state, who've made it clear their commitment.

But he also has said that, in fact, if there's a point where people don't seem to be serious -- at NATO, he noted, it would be a matter of weeks where we determined whether Russia was serious. And, of course, the secretary has made it very clear that we are not going to have meetings about meetings. We're -- we're not going to have this drag on for a year.

This is about ending the carnage, stopping the madness that is going on, creating a full cease-fire so that people will stop dying. Now, if you have got one changed meeting, it's interesting that there's a focus on that. The fact of the matter is leading up to this and after this will be the kind of diplomacy that the world has not seen before led by President Trump to get these intransigent kind of situations to the table, so that we can have a resolution.

That continues.

BROWN: OK.

BRUCE: And I -- we -- the American people in the world has seen the commitment of Trump and Rubio in this regard.

BROWN: All right, let me just follow up with that, because what I said is actually what Zelenskyy himself said. This wasn't just reporting that's floating around out there by anonymous sources.

Zelenskyy himself said that he will not accept Russia controlling Crimea, which is part of the U.S. proposal. In 2014, then-Senator Rubio, now secretary of state, said -- quote -- "It's quite shocking and, frankly, outrageous how they're getting away with this," talking about Russia's invasion of Crimea.

By making Russian control part of the peace deal proposal, is the U.S. letting Russia get away with it?

BRUCE: Let me -- let's make something quite clear here. This is not going to be discussed on TV, not between you or me.

It's not going to be a discussion over TV or television or dinner or anywhere else, that these are -- yes, President Zelenskyy, I respect a great deal. And he's going to say what he needs to say. But there's a reason why you do want to be able to sit down and talk. And it's why the secretary has been committed to that constantly for the last 100 days.

It has been a hallmark of his secretariat up to this point. Getting to peace and cease-fires is a hallmark and a North Star of President Trump's administration. And that's -- and it's working because it's not a debate on television.

It is -- it's a discussion between the men and women who have an impact on this and can make decisions. And, again, you will hear these leaders say things independently in op-eds or to television anchors. But what matters is when they sit down. And this is -- has been happening and it's going to continue to happen.

BROWN: How long will it continue, though?

BRUCE: And, of course, we will see, as the secretary has said -- well, that is what Secretary Rubio has already pointed to and that it will not go on forever. It will not go on for months.

BROWN: But...

BRUCE: But it's a matter of what these individuals -- just a minute.

These individuals, what they know in their private conversations through diplomatic negotiations and conversations and meetings is not something that is fair to discuss on television, speculate about or muse about. Their success is based on their actions. And it does not come from a conversation like this on television.

BROWN: I'm just talking about Secretary Rubio's own comments himself.

BRUCE: All right, well, I think I have answered that. I have answered this. And I have said -- look...

BROWN: Secretary Rubio made the comments himself and J.D. Vance that they're willing to walk away. And you have Ukraine saying that it would not agree to a key part of the U.S. proposal. So it is very fair to ask about that and to press about that. So...

(CROSSTALK) BRUCE: Let me just say -- and I have answered you multiple times about the difference between genuine negotiations, which the president has, of course, encouraged, and his vision involves that. Secretary Rubio has, of course, engaged in that, as has the president with Putin of Russia.

[11:25:05]

BROWN: OK.

BRUCE: But for you -- I know you want to have a sense of what ratings might be or pulling people in.

(CROSSTALK)

BROWN: No, it's not that. We're just trying to get answers for our viewers.

BRUCE: Of course it is.

BROWN: It's not any of that.

BRUCE: I -- we -- they have answers from the actions of the State Department and the White House.

BROWN: OK. I want to ask you about something else, and that is what's going on at the State Department.

BRUCE: And we will not have this debate. Certainly, it's not going to be a negotiation between you and me. And you know that. I know that. And the audience should know that this is a dynamic that is very different than this kind of an exchange, which is unfortunate.

BROWN: OK.

You are the State Department spokesperson. It is very fair for me to ask you basic questions about what has been said publicly.

BRUCE: I'm trying to be, and for you to accept my answers.

(CROSSTALK)

BROWN: So I also want to go up to what's going on at the State Department.

BRUCE: And for you to accept my answers.

BROWN: OK, but some of your -- you didn't answer some of my questions, which is why I followed up, which is my job.

BRUCE: Of course I did. I answered...

BROWN: I want to ask you about the shakeup that the State Department just unveiled.

BRUCE: I didn't answer it the way you wanted me to answer it. BROWN: OK. That's not true.

BRUCE: That's the difference. I answered them, but not in the way that you wanted. Of course it's true.

(CROSSTALK)

BROWN: Tammy, let me ask you what is going on within the State Department. It doesn't help anyone and any of our viewers unless I can get the question out.

According to senior officials and documents obtained by CNN, Kylie Atwood just laid it out, offices that focus on war crimes and global conflict are being eliminated. Why were those offices targeted? And are they...

BRUCE: No, they're not. No, they're not.

BROWN: OK, so they're not. So, help -- OK, so fill us in, because...

BRUCE: They're not being eliminated, yes.

BROWN: OK, so what's going on? Please fill us in with some information.

BRUCE: Sure. Sure.

Well, yesterday, the secretary had an opinion piece. He also had a statement that he'd made. I did a full briefing here at the State Department making it clear what was going on. And I will reiterate it here now, is that this is definitely a consolidation here at the State Department.

There are -- the bureaus, certain bureaus that have been discussed to being eliminated are not being eliminated. They're being moved into another bureau. Perhaps they're being consolidated. But the work that matters to people, that has always mattered to the State Department, that we are the hallmark of continues.

And it is a dynamic where you have got such a system that has been moving and growing so large to where it has become unmovable and dysfunctional to being able to get the work done that the American people want done. This is a matter of maintaining the traditional element of what the State Department has stood for, which is diplomacy around the world, functioning frameworks that actually we can get things done in a faster manner in this modern age.

And this requires cutting down a system that has become bureaucratic, constipated, unable to move. And these changes will maintain the nature and the importance and the values of what we have wanted, what is important to diplomacy here and around the world by making it more condensed, more nimble, more effective, and more efficient.

BROWN: Are the priorities changing as a result?

BRUCE: No, not at all. As a matter of fact, the people will see that the priorities that they care about, which, again, is the matter of the spreading of democracy, the values of the United States moving around the world.

The values of the Trump administration as reflected in the vote, the mandate he got in November is that Americans want for America to be great again. They want the values of America, which is personal freedom and democracy, to be acceptable around the world. And that can only happen when you have got a voice at the State Department and information moving through that is clear, that is about making the State Department great again and making it possible to actually get things done.

We know bureaucracy, whether it's in business or in government or anywhere else, at schools, slows things down. It keeps things from being able to happen. And it's about making sure those values are implemented and actually get things done and are being able to be enjoyed by the world as the world becomes a better place.

BROWN: Let me just follow up on that, because, as you laid out...

BRUCE: Sure.

BROWN: ... a big priority is personal freedom, democracy, promoting democracy around the world.

BRUCE: Sure.

BROWN: What do you say to the critics of what they have seen this administration do, such as dismantling in large part USAID and pulling back workers from all over the world whose -- part of their core mission was also to try to promote democracy and try to maintain America's power?

And there's concern that China and other countries are now filling in that vacuum. What do you say to those critics?

BRUCE: I would say to those critics that they should listen to what Samantha Power said last year, the last USAID director under Joe Biden.

She said publicly in two interviews and at a public event that she was very frustrated at the fact that about 10 percent of 100 percent of the money that was allocated to certain foreign aid, to all foreign aid, only 10 percent of it went to the issue; 90 percent was eaten up by bureaucracy and contractors and layer after layer of people making money on those efforts.

What we say here with this dynamic, it's not that we're pulling back on foreign aid or what's important to us. It's actually getting it back to the point where we can make a difference, where the money that is spent actually goes to the issues that matter to the American people, that matter to the nations that we are assisting.

[11:30:00]