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Trump and Xi Toast U.S.-China Relationship at State Banquet; Retail Sales Only Rise 0.5 Percent as High Gas Prices Squeeze Budgets; All 11 Plane Crash Survivors Rescued After Stranded at Sea. Aired 10- 10:30a ET

Aired May 14, 2026 - 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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[10:00:00]

PAMELA BROWN, CNN ANCHOR: Happening now, breaking news, China's new warning. We'll take you behind the pageantry and inside the critical summit between President Trump and Xi Jinping.

Plus, one-on-one with Jake Sullivan, we'll talk to the former National Security Adviser about China, Iran, and America's posture on the global stage in a CNN exclusive interview.

And later, incredible rescue, five hours in a raft after their plane crashed, then saved by Air Force and Coast Guard rescue jumpers and helicopters. We'll bring you this phenomenal story just ahead.

WOLF BLITZER, CNN ANCHOR: Massive attack on Kyiv. Russia fires more than 1,500 drones at the Ukrainian capital, killing five people, including a 12-year-old child.

Right now, CENTCOM commander on Capitol Hill, Admiral Brad Cooper, is testifying in front of a key Senate committee about defense funding.

And later, running toward flames, a brave police officer rescues a family from a fiery home. We have the full story. That's coming up ahead.

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.

We begin with the breaking news out of Beijing, President Trump raising a glass with the Chinese leader, Xi Jinping. But can they find any common ground as the first day of talks at a state banquet wrap up?

Xi praises the ties between the world's top two economic superpowers through a translator. Listen.

(BEGIN VIDEO CLIP)

XI JINPING, CHINESE PRESIDENT: We both believe that the China-US relationship is the most important bilateral relationship in the world. We must make it work and never mess it up. Both China and the United States stand to gain from cooperation and lose from confrontation.

(END VIDEO CLIP)

BLITZER: One possible confrontation, a red line over Taiwan. China's state media is reporting that Xi warned President Trump that Taiwan is the most important issue between the two countries right now. And Xi says, if mishandled, could create, and I'm quoting him now, a very dangerous situation, end quote.

The Chinese Communist Party has long vowed to unify the island with the mainland, even if it requires military force.

CNN Senior White House Correspondent Kristen Holmes is in Beijing traveling with the president. Kristen, what can you tell us about this first day of talks there?

KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, look, Wolf, everything we've heard so far has been a lot of praise and a lot of flattery, which isn't that surprising given that they still had to get through another 24 hours of activities. This was the large bilateral meeting.

We believe that several deals were struck in terms of economic deals. We've already heard from Secretary of Treasury Scott Bessent, who alluded to the fact that there might be deals coming down the pipe when it comes to jetliners. The CEO of Boeing is one of the CEOs that traveled with the delegation over here to Beijing. And we expected some kind of deals to come from these private sector companies that were alongside President Trump. It certainly sounds as though that was what they were working their way through on this first day.

Now, interestingly, in that readout we heard from the Chinese state media, but also from the foreign minister, they talked about this threat, this veiled threat that President Xi issued about Taiwan, no mention at all about Taiwan in the readout that we got from the White House.

Now, on Iran, this is where we were really trying to figure out this sticking point, what President Trump was going to ask for. We've gotten somewhat of an insight into this. Of course, it's coming from his own secretary of state, Marco Rubio, who just did an interview, and this is how he described President Trump's conversation with President Xi over the issue of Iran.

He said that he raised the issue of Iran, but didn't ask them for anything, says, we're not asking for China's help. We don't need their help. We raise the issue to make clear what our position is and to make clear so they understand, because it's logical we would talk about it given how dominant that issue is.

[10:05:03]

Now, in the Chinese readout of all this, Iran was mentioned almost vaguely, no kind of specifics there. We know that China remains a very close partner with Iran. The big question here is whether or not we see any kind of push on Iran or Taiwan tomorrow. This is going to be a much closer-knit group. It's going to be a lot smaller. And this is where we expect them to get really into those sticky issues.

The other point about tomorrow's bilateral meeting that you have to keep in mind, that's the end of the trip. There's no more celebrations. There's no more toasts. There's no more big events to get through. So, that's really where you're going to see them hammering out the details and likely getting real with one another as they set up to actually announce these deals and President Trump sets up to leave.

BLITZER: Kristen Holmes in Beijing for us, Kristen, thank you very, very much. Pamela?

BROWN: All right, Wolf. Let's go live now to CNN Business Senior Reporter David Goldman to make it make sense. He is tracking the five key numbers steering this summit.

So, David, help us break through the noise. What do we need to know?

DAVID GOLDMAN, CNN BUSINESS SENIOR REPORTER: Yes. Kristen talked about sticky issues. They are sticky indeed because the first number you need to understand is 600 million. That's the number of Chinese A.I. users, according to China. That is why President Trump brought with him Elon Musk and Jensen Huang and Tim Cook. There's a massive market to be tapped in China with the key technology for U.S. national security, and that is A.I.

The second number you need to understand is 93 percent. That is the control of the rare earth market that China has. We know that the United States needs to restock its weapons after the Iran war. What makes those weapons work? Rare earth minerals. China has control over that. That will be a big sticking point.

80 percent is the next number you need to know. That is the percentage of Iranian oil that China buys. It's probably even more than that. That was before the war. China needs the Strait of Hormuz to be reopened because it relies so heavily on Iranian oil. President Trump knows that. That will be a big point of leverage as well.

$25 billion is a big number. That's the amount that Taiwan just approved to buy U.S. military equipment. You just heard Kristen talking about how serious Xi is about this issue. That will be a topic of consideration as well.

And then 10 percent is the last number you need to know. 10 percent is the tariff that the United States has put on Chinese goods. Now, remember, a year ago, it was 145 percent. It's come down a lot because the Supreme Court says Trump doesn't have the ability to put any tariff he wants. He's lost a little leverage there. Pam?

BROWN: David Goldman, thank you for helping us better understand everything that's going on, as always. And if you'd like to help -- if you'd like David to help you make it make sense, email your question or send us a selfie video of your question to makeitmakesense@cnn.com. Wolf?

BLITZER: And there's more breaking news we're following. New data just in shows Americans are continuing to spend despite record low consumer sentiment right now. Retail sales are rising for a third consecutive month in April.

Let's go live right now to CNN Business and Politics Correspondent Vanessa Yurkevich. Vanessa, walk us through these latest numbers.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, Wolf. The resiliency of the US consumer strikes again. For the third straight month, retail sales increasing. That's increased spending by everyday Americans despite rising prices at the grocery store, rising gas prices, and record low sentiment.

Look at those numbers on your screen. In the month of April, retail sales rising by 0.5 percent. That's just shy of the expectation, which was 0.6 percent, and then rising almost 5 percent on an annual basis.

Where Americans are spending and where they're not spending in the month of April? There was a pullback in durable goods, so goods that are designed to last. You did have a pullback in spending on car and car parts, down 0.4 percent, furniture, 2 percent, clothing and accessories, a pullback of 1.5 percent.

But then, of course, Wolf, spending increasing at the gas station because gas prices are up more than 40 percent since the beginning of the war, but then spending at restaurants and bars up 0.6 percent. That is discretionary spending, and that is usually where we see consumers pull back first. So, resiliency of the U.S. consumer despite all of this economic uncertainty.

Wolf, analysts are warning that sometimes it does take a little bit for higher gas prices to factor into household budgets, so we'll just have to watch over the next couple months whether the U.S. consumer continues to spend or starts to reorder their household budgets and we start to see a little pullback on spending.

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Wolf?

BLITZER: Vanessa, we also just got some new jobless numbers just in. What do they show?

YURKEVICH: The number of people applying for first-time unemployment rose just a little bit last week, 211,000 Americans filing for first- time unemployment. That's just an increase of about 12,000 from the week before. That is really sort of trailing and in line with the historical trend that we've seen over the last year or so. This really indicates a low fire, low hire market.

We did see a big number in the month of April in terms of jobs added, 115,000. But if you average that out over the year-to-date, it's about 76,000 jobs added every single month, with the exception of the tech industry. This is an industry that has been shedding jobs since the beginning of the year. Just look at these numbers. So far this year, tech companies have laid off 108,000 people.

But look at that compared to all of last year, Wolf. We're right behind all of last year's layoffs, 124,000. So, you're talking about layoffs at places like LinkedIn, Cisco, Meta announcing that they're cutting about 10 percent of their workforce, 8,000 people. And, Wolf, this is all of because of artificial intelligence playing a role in the way businesses are hiring.

Just to leave you on a good note, there is hiring though happening in healthcare and also in transportation and warehousing. Those two sectors have been leading the way for jobs added. The tech industry though this year shedding an incredible amount of jobs compared to what was shed last year. Wolf?

BLITZER: All right. Vanessa Yurkevich reporting for us, lots of numbers, thank you very, very much. Pamela?

BROWN: All right, Wolf. Breaking overnight, at least six people are dead after Russia unleashed a wave of strikes targeting Ukraine's capital city.

As you see, explosions lit up the sky in Kyiv, and our CNN team on the ground there said air raid alarms rang out for 11 hours.

Video from the border shows the Ukrainian military shooting down a drone. Ukrainian President Volodymyr Zelenskyy says more than 1,500 drones were fired off by Russia just yesterday. Zelenskyy also notes that Kyiv was the main target with 20 different locations damaged across the capital city.

And in a nearby village, officials were on hand to remove what they say is part of a missile warhead that landed inside a residential building.

BROWN: All right. Still ahead here in The Situation Room, detecting lung cancer, what one runner and non-smoker learned about the disease after she was diagnosed at just 44 years old. She'll join us just ahead.

BLITZER: And will President Trump and President Xi Jinping hash out an economic deal to benefit American companies? I'll speak to Congressman Jared Moskowitz, who sits on the Foreign Affairs Committee. That's coming up just ahead.

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

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BLITZER: Breaking news, the treasury secretary, Scott Bessent, says the U.S. is nearing a deal with China to sell a large order of Boeing aircraft. He added the two countries will also discuss how to establish guardrails for developing artificial intelligence.

President Trump is in Beijing for a state visit, where he's been joined by several administration officials, along with some very high- profile business leaders, including Elon Musk and Tim Cook.

Joining us here in The Situation Room is Democratic Congressman Jared Moskowitz of Florida. He serves on the House Foreign Affairs Committee. Congressman, thanks so much for joining us.

What's your sense of what, if anything, you think the president has accomplished at least so far during his China trip?

REP. JARED MOSKOWITZ (D-FL): Well, obviously, look, stuff is just starting to come out. You know, a lot of this stuff has probably been agreed to before the trip even started. Getting the market, the Chinese market open to U.S. companies, specifically Boeing, would be a big deal. You know, working on some guardrails for artificial intelligence would be great.

Talking about rare earth minerals with the Chinese, who control a lot of that around the globe, extremely important. Some news came out that the Chinese has agreed to work with U.S. in trying to get the Strait of Hormuz open. We'll have to see the details of that.

You know, but a lot of this has been worked out beforehand. There's some reports about us selling -- allowing NVIDIA to sell chips to the Chinese. I would be against allowing NVIDIA to sell their most advanced chips to the Chinese. We're going to -- again, we're going to have to see the details of that. You know, right now a lot of platitudes, the details really matter.

BLITZER: President Trump did not respond to reporters' questions about whether he and President Xi spoke about Taiwan during the meeting. Xi, on the other hand, he warned that Taiwan is, quote, the most important issue in the U.S-China relationship and could create a very dangerous situation, his words, if mishandled. What's your read of that?

MOSKOWITZ: My guess is Taiwan is not really being discussed. That's -- there's no movement from the Chinese. There's not going to be any movement from the U.S. on that either. I think President Xi is just restating what he's said before, that that's their most important issue. But, obviously, the relationship we have with Taiwan has not changed.

And so there's not going to be any progress made on that issue. But, obviously, at the same time, we don't want it to wind up in conflict. So, right now, that's a status quo issue.

BLITZER: The Taiwanese are purchasing a lot of U.S. military equipment, as you know.

MOSKOWITZ: Yes. And, again, that's obviously the center of the world of chips, right? I mean, this is a strategic piece to the United States' economy on a go-forward basis, specifically in the A.I. race. And so there's a lot at stake for the United States if the Chinese wanted to take all of Taiwan.

[10:20:04]

BLITZER: A White House official made clear to us that Iran was a key topic of conversation between the two leaders, and that President Xi expressed interest in purchasing more American oil to reduce China's dependence on the Strait of Hormuz. That same official, however, did not say (INAUDIBLE) expand China's involvement in helping to end the Iran war. How do you interpret all this?

MOSKOWITZ: Well, again, details matter. I mean, look, if the Chinese want to purchase oil from the United States, fantastic, right? How much is it really going to move the needle? As we know, the Strait of Hormuz -- the Chinese get a lot of oil through the Strait of Hormuz and through Iran.

So, look, if the Chinese can help us get the straits open, that's obviously important. Let's see if they make any real moves. It's also not clear, quite frankly, based on, you know, who might be in charge or not in charge in Iran, if the Chinese can even help.

So --

BLITZER: Who is in charge?

MOSKOWITZ: Well, we don't really know. I think that's part of the problem of trying to get a deal is. You know, you got the, the supreme leader's son, you got the IRGC. I mean, they have different -- it appears that they have, you know, different objectives. And so I think that's why it's been extremely hard to try to get a deal on the straits and try to move on the nuclear issue, both on the fissile material and a commitment to not -- to abandon, you know, their idea of getting nuclear weapons.

We'll have to see what the Chinese are willing to do. It's nice that they say they want to help. We need to see that happen. Or perhaps maybe the Chinese don't have the influence in Iran that we think they have.

BLITZER: What role can China really play in ending the Iran war when so many Iranian regime officials feel this war is existential?

MOSKOWITZ: I'd have the Chinese focus on getting the Strait of Hormuz open. The statement was is that the United States and the Chinese have agreed that there should be no toll charged to go in the Strait of Hormuz. That would obviously be good news. Now, let's go institute that. Let's get the Iranians to come out and say they also won't be charging a toll because, obviously, you know, they could raise hundreds of millions of dollars doing that. It would drive the cost of goods up, and they would just continue to fund their terror networks.

And the Gulf States are not going to stand for that. You know, the Saudis, the Emiratis, they're not going to stand for Iran charging a toll. So, let's see if the Chinese can actually help us get that implemented. BLITZER: Overall, China says that President Xi and President Trump agreed, and I'm quoting now, to a constructive, strategic, stable relationship. That's the way they described it. And they say it involves cooperation, competition, and stability. Do you give the Trump administration any credit for that?

MOSKOWITZ: Using all of those verbs? I mean, listen we want our relationship with China to be stable. You know, they're not our friend, but they don't necessarily have to be a daily adversary. There can be ways in which we can find to work with China.

But, obviously, look, China's a rising empire. That's something the United States is going to have to deal with. It's not something we've had to deal with, you know, for a very long time. And so we have to find ways to cooperate, but we also have to find -- we have to stand up to China. We can't just let China, you know, run roughshod over everything.

But they're expanding their influence, not just to the United Nations, they're expanding their influence in Latin America. They're expanding their influence in Africa. They are expanding their influence to their road and bridge initiative in Europe. So, China's on the move.

And so when we have these talks in Congress about, you know, we should remove foreign aid from other countries, everyone needs to understand when we do that, China comes in with their money, and they're expanding their influence. So, this is something that we're going to have to grapple with over the next several years.

BLITZER: Good point indeed.

Democratic Congressman Jared Moskowitz of Florida, thanks very much for coming in. Welcome to Washington. Pamela?

BROWN: All right. Coming up here in The Situation Room, a miraculous rescue, 11 people saved after their plane crashes into the Atlantic Ocean. Their amazing story up next.

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[10:25:00]

BROWN: Pretty miraculous. That's how one Air Force pilot described the rescue of 11 people stranded at sea. The group is lucky to have survived, to say the least, after their plane crash landed into the Atlantic Ocean off the coast of Florida, and then they floated on a life raft for hours until help arrived.

So, let's bring in CNN Aviation Correspondent Pete Muntean to talk about this truly miraculous story and how it all unfolded.

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: We just heard from one of the survivors, Olympia Otten (ph), who was on that flight with her son and her niece making the roughly 100-mile flight between Marsh Harbour and Freeport in the Bahamas to vote. She says the pilot got off course trying to avoid storms, lost GPS navigation, started running low on fuel, causing both engines to quit and forcing them to ditch in the Atlantic. All 11 people on board then spent five hours floating in the open ocean, waiting to be rescued.

This is some of the incredible video and new images from the 920th Rescue Wing of the United States Air Force. The Coast Guard says it first received the distress signal from that downed plane around 11:00 A.M. Eastern Time on Tuesday. Incredibly, the crew of an Air Force HC- 130 rescue plane was already nearby on a water rescue training mission that clearly turned into the real thing. The HC-130 crew says they quickly found the survivors floating together in a single life raft roughly 80 miles east of Melbourne, Florida.

The crew dropped extra rafts, food, water, emergency gear, also helped dispatch an emergency rescue helicopter from the Air Force. The Air Force said the weather was deteriorating pretty quickly, and thunderstorms were nearby, seas between three and five feet. The rescue crew hovered about ten feet above the water while rescue men hoisted the survivors up to the helicopter one by one.

Olympia Otten says, when rescuers finally appeared overhead, remember, they were in the water for five hours, everyone on board the raft began crying and celebrating because they were terrified they would never be found.

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Listen.