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U.S. Economic Growth Sharply Declines in First Quarter; Soon, Live Coverage as Trump Convenes Cabinet Meeting; Trump Says He Could Bring Abrego Garcia Back to U.S. But Won't. Aired 10-10:30a ET

Aired April 30, 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: Happening now, breaking news, going in reverse. A new report shows the U.S. economy just caught its worst quarter since 2022. President Trump's economic policy is likely to be front and center when he convenes his cabinet next hour.

WOLF BLITZER, CNN ANCHOR: Immigration moves going too far. A new CNN poll shows most Americans oppose President Trump's hard line deportation policies.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer with Pamela Brown, and you're in The Situation Room.

Happening soon, President Trump calls together his cabinet. We're going to take you live to that White House meeting when it begins right at the top of the hour. One likely topic new economic numbers showing a sharp slowdown in the first three months of this year, the economy lurches into reverse in a new measure of President Trump's policies.

CNN's Alayna Treene standing by live at the White House for us. CNN's Business and Politics Correspondent Vanessa Yurkevich is live in New York. Vanessa, this morning we're learning more about the nation's total economic output. What is this new report telling us?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: This report signals that the first quarter of this year, there was an economic slowdown, a contraction. We haven't seen that since 2022 during the height of COVID.

Now, the U.S. economy contracted down 0.3 percent. That is the preliminary estimate. Compare that to what we saw in the last quarter of last year when the economy grew by 2.4 percent. And the reason that we saw this contraction is largely because of imports. The U.S. imported a ton of goods and imports is a subtraction from GDP. Also there was a weakening, a decline in government spending that was primarily led by federal government cuts, and we can attribute a lot of that to the DOGE cuts that we have seen.

Consumer spending softened. You also had government spending, as I mentioned, that weakened. You had the investment increase a little bit, but, really, the imports was the biggest drag on this first quarter GDP reading. Just look at the comparison from what we saw in the last quarter of 2024. You had imports decline a little bit by 1.9 percent. But if you compare that to what we are seeing in this quarter, this projection, imports soaring over 41 percent. You can see it on your screen right now, Wolf. And that is of course, because of President Trump's tariffs. Businesses wanted to front load a ton of product and goods, get that into the country to beat the tariffs that he was messaging was coming in April.

This report looks at January, February, and March. This is a preliminary reading. But, of course, the question is, Wolf, what does this mean for a recession? The definition of a recession is two negative quarters of GDP. Here is one. What happens in the second quarter? And just look at how markets are reacting. Look at how Wall Street is reacting. They do not like this. The Dow down almost 700 points as Wall Street is now looking at this and thinking, are we heading for that recession that many economists have been forecasting. Wolf?

BLITZER: They certainly have. All right, Vanessa Yurkevich in New York, thank you very much. Pamela?

BROWN: All right, let's go live now to CNN's Alayna Treene at the White House. Alayna, how is the administration responding to these new economic numbers?

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Well, we have heard now from the president himself directly and some of his economic advisers. I want to start though, with what President Donald Trump said. He posted on social media essentially attempting to blame former President Joe Biden for these poor economic numbers.

I want to read for you some of what he wrote. He said, quote, our country will boom but we have to get rid of the Biden overhang. This will take a while, has in all caps, nothing to do with tariffs. Only that he left us with bad numbers. But when the boom begins, it will be like no other. Be patient. So, essentially, here, you're hearing the president saying, you know, I came into office on January 20th. This is not my fault. It's Biden's. We have to get through that and try to argue that this has nothing to do with tariffs.

Of course, we know that's not exactly the case. The economy, Republicans on Capitol Hill, economists, a lot of them warning about the impact, negative impact that the tariffs are having on the United States economy.

I also just want to point you, though, to what we heard from his trade advisor moments ago, Peter Navarro, who was speaking on CNBC. He said essentially, noting kind of what Vanessa said, that the import surge, you know, stocking off on in imports in anticipation of these tariffs, played a role in these numbers and the contracting of the economy.

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And then he also said some of it he believes had to do with DOGE and the reducing the size of the federal government. This is a very, you know, fascinating, remarkable line from Navarro though. He then said, quote, that's the best negative print I've seen in my life.

So, clearly, you're getting the spin here from the president's top economic team, trying to argue that this is a short-term thing. There are good reasons for why the economy would respond this way. Be patient. But, again, this is coming at a time when, of course, a lot of people in the Trump administration, my conversations with top administration officials note that there is a lot of anxiety about how they are handling the economy. And they know that they need to deliver some good news soon on this to really kind of create more optimism among American consumers. Pamela?

BROWN: All right. Alayna Treene, thank you. Wolf?

BLITZER: All right, Pamela. New this morning, President Trump appears to be losing major support on the central theme of his campaign, illegal immigration. Brand new CNN polling found a majority of Americans are not happy with his administration's handling of a Maryland father who was mistakenly deported to his home country of El Salvador. When asked if the White House should try to bring back Kilmar Abrego Garcia, 56 percent said yes. 20 percent said no. President Trump says he could bring him back but won't. Listen.

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DONALD TRUMP, U.S. PRESIDENT: This is not an innocent, wonderful gentleman from Maryland.

UNIDENTIFIED MALE: I'm not saying he's a good guy. It's about the rule of law. The order from the Supreme Court stands, sir.

TRUMP: He came into our country illegally.

UNIDENTIFIED MALE: You could get him back. There's a phone on this desk.

TRUMP: I could.

UNIDENTIFIED MALE: You could pick it up. And all the power of the presidency, you could call up the president of El Salvador and say, send him back right now.

TRUMP: And if he were the gentleman that you say he is, I would do that.

UNIDENTIFIED MALE: But the court has ordered you to facilitate that.

TRUMP: I'm not the one making this decision. We have lawyers --

UNIDENTIFIED MALE: You're the president.

TRUMP: -- that don't want to do this.

UNIDENTIFIED MALE: But the buck stops in this office.

TRUMP: No. I follow the law.

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BLITZER: CNN Senior Political Analyst Mark Preston is here with us in The Situation Room. Mark, we can see how Americans feel about the case of this Maryland man. How are they feeling about deportations in general?

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Well, Wolf, you know, this is bad news for Donald Trump. We know that he uses immigration as a way to distract away from bad news. Look at these numbers right here. This is disturbing for Donald Trump. He has lost seven points just over the last couple months. He is now underwater when it comes to immigration. Has he gone too far? People think he's gone too far, perhaps in his rhetoric, certainly, sending people overseas.

But remember, this is a signature issue for him, Wolf. This is something that he created, made for T.V. moments for, and the American public right now does not seem to be on his side.

BLITZER: The Trump administration, Mark, says the deportations are necessary to make the country safer. Do most Americans agree?

PRESTON: No, they don't, certainly not at this point. It is an evenly divided America right now. If you look at these numbers right here, 52 percent of America do not think that it is making America more safe. 47 percent of Americans believe it is so. So, it is close enough, and it just goes to show you how divided we are now, Wolf.

BLITZER: How do Americans' attitudes break down on very different aspects of Trump's immigration policies?

PRESTON: Well, this is really interesting right here. I mean, we just got to go right to the graphic here. It just goes to show you where people are on the issue of immigration. 44 percent of folks support sending U.S. troops to the Mexico border. But that's really the best issue that he has when it comes to immigration. If you look at giving him wartime authority for deportations, half of Americans oppose it. Deportations to the Salvadoran prison, sending people down there, more than half of the people oppose it. And revoking these international student visas, and we've seen a lot of work done by Shimon Prokupecz on this, 55 percent of Americans don't agree with it, Wolf.

So, this is certainly an issue where Donald Trump was hoping to gain a lot of political, you know, supports for, you know, as he heads into his, you know, next couple of months of his administration and he's in some trouble.

BLITZER: And the Republicans are watching it, obviously, very, very closely.

Mark Preston, thank you very, very much. Pamela?

BROWN: All right. Still ahead, we're talking with the top White House economic adviser, as President Trump continues to blame current economic woes on President Biden. You're in The Situation Room.

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BROWN: Returning to our breaking economic news just moments ago, the Fed's preferred inflation cooled in March. That news comes on the heels of the first quarter, GDP estimate out earlier this morning, showing the economy shrank in the first three months of this year.

Joining us now is Stephen Miran. He is the chair of the White House Council of Economic Advisers. Stephen, thank you for coming on.

So, this latest inflation report showed prices in aggregate our study. It's also backward-looking from before the president's tariffs on April 2nd. The latest GDP report shows it's in the negative. If it's in the negative for a second quarter, that typically means we're in a recession. What is your concern about that happening right now?

STEPHEN MIRAN, CHAIR, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: Good morning. Thanks for having me. Look, you know, I don't think that this morning's GDP print is consistent with an economy that's under any sort of stress. If you look at it, investment grew 22 percent, a surge in private investment, 22 percent in the last quarter. That's not what firms do when they're concerned about the economic outlook.

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That's not what firms do when the economy is shrinking as a whole. That's what firms do when they believe in the future and that they're re-shoring activity and they're bringing production activity back to the United States, which is exactly what the president said would happen and is exactly what's happening.

BROWN: So, you have the investments and you also have consumer spending. And this GDP report shows consumer spending, the lifeblood of the U.S. economy is slowing, right? How do you convince consumers to spend with so much economic turmoil, even right now as we're looking at the stock markets down more than 500 points?

MIRAN: So, consumer spending was extremely weak in January, and that was a result of lingering problems with the economy left to us by President Biden's economic policies. Inflation was extraordinarily high in January in contrast to more recent months. There was bad weather. There were lingering problems with government subsidies. There were wildfires. January was a very weak month for personal spending, and that spilled into the consumption data for the quarter as a whole.

Now, what you see is that that accelerated, you know, in the later part of the quarter after the president was inaugurated and after people became more confident for the economy.

BROWN: Okay. So, I want to just talk about a few things that you just mentioned. I want to talk about the economy that was inherited, because I know that President Trump this morning is saying this is Biden's economy. But economists from all different stripes have said that, actually, President Trump, when you look at certain metrics, inherited a strong economy. When you look at consumption, when you look at growth, when you look at the job market, when you look at the stock market, when you look at consumer confidence, and that is aside from inflation, right?

And when you look at consumer confidence, it's at a five-year low right now. This new CNN poll shows 59 percent believe Trump's policies, not Biden's, Trump's, are making the economy worse. What do you say to those Americans? Why don't you think that they're buying what you're selling right now?

MIRAN: Thanks. So, look, you know, it absolutely is the case that there are forward-looking elements of this report that are quite positive. And so I just mentioned the investment surge that's forward- looking, that's quite positive. And it's also true that there was a weird historical anomaly with respect to the inventory data and import data that the Bureau of Economic Analysis had trouble reconciling. So, if you strip at those volatile components and you look at underlying GDP growth, which is better for predicting the future, it actually was quite a bit better. So, there are some silver linings here.

Now, with respect to the consumer sentiment data, you know, what I would say is that the correlation between consumer sentiment data and actual consumer spending has broken down a lot in the last decade. The predictive power of consumer sentiment has not been that strong thinking about where the economy is going. It seems to be driven a lot more by political preferences. It's driven by what financial markets are doing. And so you get a divergence between sentiment data and hard economic activity, which has been holding up much better recently.

BROWN: And that's certainly a fair point to talk about, you know, what the data shows, what people say in sentiment and what you're seeing actually in the economy. But it's not just a one-off data point, right? You have the consumer sentiment data. You have the president's approval ratings on the economy is down to just 39 percent. That's not just CNN's poll. I mean, several different polls are showing that. And you're seeing in this latest GDP report that consumer spending is going down.

And I'm wondering, as you well know, even though you're confident about the direction of the economy, it can sometimes be a self- fulfilling prophecy for consumers. If they're feeling down and out about the economy, if they're worried about spending, worried what's going to happen in this turmoil, then it's a bad thing for the economy. Does that concern you?

MIRAN: Look, you know, the president acted with truly historic scope and speed to start putting American workers on fairground, vis-a-vis our trading partners, and to start putting American workers and families and firms first instead of last, as they've been for a few decades, right? It shouldn't be surprising at all that there'd be some financial market volatility accompanying that. And I think that's being reflected in a lot of these sentiment data.

But what the administration is focused on, what the president is focused on, is creating the best economy in history. We're focused not only on fixing our trade asymmetries with our trading partners, but also on tax relief for American citizens, for American families that the president promised in the campaign trail, no tax on overtime tips, Social Security, creating further incentives for firms to invest in America, to produce things in America, to make America where to build and hire, and cutting away at regulations that get in the way of doing business and that prevent firms from making the investments they need and hiring the workers they need.

And what we're focused on is creating the best economy in history and the best economy in the world later in the year. And, eventually, you know, sort of capital will start flowing into those economic opportunities that we're creating, it'll get reflected in consumer sentiment. It takes time to create that and we're working on it, but we are determined to do so.

BROWN: What makes you think though, Americans will be patient, that Americans are just going to trust Donald Trump and that everything will be fine, as he says? What gives you the certainty that they're willing to do that, especially given the latest number in the data?

MIRAN: Look, we're coming off of decades of previous administrations putting American workers and firms last and prioritizing our trading partners over Americans.

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And President Trump has taken historic action.

Now, you can't undo decades of those accumulating problems overnight. It will take some time. But the administration is focused on it, and we are focused on creating the best economy in history. And so, you know, we are in the process of implementing our policies. The tax bill is working its way through Congress. I'm optimistic it'll be passed within a couple of months. We are chipping away at the regulations to make it easier to do business in the United States.

BROWN: And I see your point about, you know, bringing back the manufacturing jobs and the trade deficit. President Biden, for his part, he tried to address it through the CHIPS Act. President Trump is trying to address it through these tariffs. And, you know, when you talk about the decades, President Trump also had four years in office in those last few decades.

But I'm just curious on the manufacturing jobs, there's different ways to go at it. And right now, there's nearly half a million manufacturing jobs open in the United States that companies can't fill. So, why is the administration focused on bringing more jobs in when there's already so many that can't be filled and the peers (ph) education and making sure these workers are skilled is really the root of the issue in this age of A.I. that we're in?

MIRAN: So, the administration is making efforts into skilling the workforce for these new manufacturing jobs, and that is a priority and we're making progress on that. And I also want to point out that in his first few months, President Trump created 6,000 new -- sorry, 9,000 new manufacturing jobs. That's historic, especially compared to the 6,000 monthly job losses in manufacturing that occurred in the last two years of the Biden administration. So, we'd been steadily losing manufacturing jobs on average every month for the last two years. And now the president comes along and starts creating all these new manufacturing jobs, and that's a signature achievement.

BROWN: All right. And I would be remiss not to ask you about China. First off, has President Trump actually talked to Chinese leader Xi about tariffs? Has there been any negotiation, because President Trump has said he has talked to Xi? And when will he lower the tariff rate, substantially, as he said last week?

MIRAN: So, look, you know, I'm not managing the president's phone schedule. Only the president manages that. But what I can say is that the president has -- you know, the president has said many times in recent weeks that he thinks we'll do a deal with China. And I think the president is right. By lowering the temperature, vis-a-vis the trading relationship on China, we can provide breathing space for our economy, for their economy, and improve the situation for everyone.

BROWN: So, I know you don't want to address whether he is talked to him, but how are you lowering the temperature right now? The rate is still 145 percent. China just came out with this video on social media. I'm sure you've seen saying that it will not bend, it will not knee; to a bully, in their words. So, what makes you think the temperature is going to down? Will the U.S. lower the rates first to lower that temperature?

MIRAN: So, I'm not going to prejudge the outcome of the negotiations, but I do think that it's in both of our country's interests to do so, and I think it's pretty obvious.

With respect to Chinese propaganda, you know, look, they've been excellent propagandists for decades and I wouldn't listen to their latest propaganda anymore than their, you know, decades ago propaganda.

BROWN: But can you just give us any more clarity, because there was a lot of people in the U.S. that are reliant, you know, on China, right when the trade policy? And I know that's one of the things that Donald Trump is trying to tackle here, but a lot of people, including farmers, Trump supporters we've had on this show are really worried about this trade war. What is your message to them? When will the temperature go down? When will this trade war ease with China?

MIRAN: So, I can't prejudge the negotiations, and I can't get ahead of where they are in this stuff. And, unfortunately, I can't give you the firm date that you want. But what I can do is reiterate that President Trump is the most pro-business president in history, and he created a true economic boom in his first term by the combination of trade reform -- sorry, trade renegotiation, tax reform, and deregulation. And that's exactly what we're doing again.

The president is determined to create a booming economy. The president's team is completely aligned behind this, and we are doing what it takes in order to do so. And the Chinese -- the negotiations with China are part of that. We will succeed in moving the economy forward. BROWN: Very quickly, follow up, President Trump said there's 200 trade deals. When are we going to see details of these deals? We have yet to see anything.

MIRAN: So, the trade deals are making good progress and the negotiating teams are hard at work moving those forward. I've been impressed with progress.

BROWN: What does good progress mean? Just to make sure I understand what you're saying, what does good progress mean? So, it's not actually finished, it's just they're in going back and forth?

MIRAN: Yes. So, they've got outlines of deals with a number of countries that are pretty close to the finish line, and it's just hammering out some details. And I expect those details to start coming out in the coming days and weeks. And I think that everyone's going to be --

BROWN: How many countries?

MIRAN: Well, we've received written offers from almost 20 countries, and those are the countries that we're prioritizing the negotiations.

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BROWN: Can you name a few, just to be more specific?

MIRAN: I'm afraid I can't. Look, you know, I'm not a trade negotiator. I'm not directly involved in the negotiations myself. You know, we're economists here at the Council of Economic Advisers. But, you know, I have been party to some of the talks and, you know, I've been impressed with what's happening.

BROWN: Okay, good. Just looking for information, but I understand you're in a different position than actually being the negotiator.

Stephen Miran, thank you so much for coming on the show and telling us what you can.

MIRAN: Thanks for having me.

BROWN: Wolf?

BLITZER: And up next, Ukraine could be about to sign an important minerals deal with the United States. It's an agreement Washington and Kyiv have spent weeks working on as they work toward a ceasefire deal at the same time.

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

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