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The Brief with Jim Sciutto

CNN International: Waltz Removed as National Security Adviser; U.S. Chamber Of Commerce Asks White House Tariff Relief; Indonesia To Increase U.S. Imports; Ukraine Signs Minerals Deal With U.S.; Pakistan Braces Possible Military Action By India; N. Korea Praises Soldiers Fighting For Russia; Amazon And Apple Q1 Earnings Report; U.S. And Japan Hold Trade Negotiation; Slate Unveils Ultra-Affordable Pick-Up. Aired 6-7p ET

Aired May 01, 2025 - 18:00   ET

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

[18:00:00]

JIM SCIUTTO, CNN ANCHOR: Hello and welcome to our viewers joining us from all over the world. I'm Jim Sciutto in Washington. And you're watching "The

Brief."

Just ahead this hour, Mike Waltz loses his job as national security adviser. He is now Trump's pick for ambassador to the U.N. U.S. urges de-

escalation as Pakistan is bracing for possible military action by India. And North Korea praises their soldiers fighting for Russia in Ukraine as

selfless warriors defending a brother nation.

We do begin with a shakeup at the top of the Trump administration, and the first reshuffle of President Trump's second term. Mike Waltz, the national

security adviser, who was at the center of the Signal Gate scandal, as it's become known, will now leave his post. President Trump says he will

nominate him to be the next U.S. ambassador to the United Nations instead, thanking him for, quote, "putting our nation's interests first."

The new position will require Senate confirmation when there're likely to be questions about Signal Gate. Waltz showing his appetite for Signal here

at Wednesday's cabinet meeting. He appears to be browsing the Signal app, including messages from Vice President J.D. Vance, the secretary of state,

Marco Rubio, Steve Witkoff, president Trump's special envoy, and the director of national intelligence, Tulsi Gabbard. That photo speaking a

thousand words.

Stepping into Waltz's shoes for now is Secretary of State Rubio, who will become the interim national security adviser. The decision clearly taking

State Department Spokesperson Tammy Bruce by surprise when she first learned about it at a press briefing.

(BEGIN VIDEO CLIP)

TAMMY BRUCE, U.S. STATEMENT DEPARTMENT SPOKESPERSON: It is clear that I just heard this from you. I had -- I -- this is the magic.

UNIDENTIFIED FEMALE: You have no heads up that this was coming?

BRUCE: Well, I -- so, that is the miracle of modern technology and the social media. So, that is an exciting moment here. I think that -- as I

know Secretary Rubio, this is a man who, as I think you all know, has worn several hats from day one.

(END VIDEO CLIP)

SCIUTTO: An exciting moment, as she describes it. Kevin Liptak is at the White House. Kevin, first on Mike Waltz. He was at the center of the Signal

Gate controversy. He added the journalist from The Atlantic. He has a new job, but is that job a demotion?

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes, I think you could safely say that this is a demotion. You know, it does come with a $15

million penthouse in Manhattan, but it's 230 miles from the West Wing, which in a Trump administration might as well be on another planet.

This is someone for whom proximity is everything, and if you're not in the corner office of this West Wing, which is where he's been working from for

the last hundred days, you might as well be nowhere. And that is essentially where President Trump is sending him.

The president is not someone for whom the United Nations is an effective body. He doesn't really have a lot of use for someone working with the

United Nations. And so, I don't think you can read it in any other way.

You know, Mike Waltz's influence in the West Wing had been waning for quite some time. And his sort of standing with President Trump never really

recovered from that Signal episode that occurred when he added a journalist to the encrypted chat. His -- he'd been on thin ice really for -- ever

since then.

You know, I think there was one episode over the last several months that really illustrated where he had essentially fallen to, which was when the

conspiracy theorist, Laura Loomer came into the Oval Office and told President Trump that a number of staffers on the National Security Council

were disloyal to him. The president fired them, essentially neutering, Waltz's ability to determine who was on his own staff.

And so, in a lot of ways the writing had been on the wall for quite some time. Now, when it comes to Rubio, this is a really a vote of confidence

for the secretary of state. There hasn't been someone who served in both of these dual roles since Henry Kissinger in the 1970s in the Vietnam era. In

a lot of ways, it will be a balance for him.

[18:05:00]

Obviously, the secretary of state job is one that is conducted mostly on an airplane, going from foreign capital to foreign capital to try and engage

in diplomacy. The national security adviser role is much different. You know, this very well, Jim. This is a job that's based in Washington.

It's meant to coordinate all of the agencies into one cohesive foreign policy, and it does require sort of being in the White House, being in the

West Wing with the president. So, how he balances both of those jobs remains to be seen. But as we heard from Tammy Bruce today, they're very

confident that Marco Rubio is up for the challenge.

SCIUTTO: Is he the sole fall guy for Signal Gate, because Pete Hegseth, the defense secretary, arguably exposed more sensitive information in that

group by sharing information about upcoming U.S. military operations in the Middle East?

LIPTAK: Yes, and it wasn't just in that group, it was in the second signal group that also included his wife and brother. So, far, Waltz will be the

only person who is dismissed as part of that. Hegseth obviously shared information, including, you know, takeoff times for some of the fighter

jets before they were off the ground and going after the Houthi rebels.

By contrast, Hegseth seems like he's very well positioned in the Trump administration. The president has voiced his confidence in him over and

over, over the last several days. And a lot of ways, this is because the president expended so much political capital getting him confirmed in the

first place, there's not much appetite on the part of the president and on the part of his top advisers to go through, one, another contentious

confirmation process, but, two, to sort of admit that this was all a mistake and that this effort that they went -- put into getting Hegseth

confirmed was all for nothing.

And so, I think for now you will see Hegseth continue in this position. But you know, that photo that you showed at the open of Mike Waltz using the

Signal app in the cabinet room yesterday, despite everything that has happened over the last several months and despite President Trump himself

saying that his officials should not be using Signal, I think just goes to show that there is still this approach to national security information

that is not necessarily governed by how, you know, many officials have said it has been governed in the past, on actual secure systems, there's

continuing to use this app in ways that I think is raising a lot of eyebrows in Washington.

SCIUTTO: Yes. And also, for government record keeping, right. Keeping those conversations in places where they can be recorded as is required by law.

Kevin Liptak, thanks so much.

Well, so far, the Trump administration has not announced a single trade deal. This, even though the top White House economic adviser has said he

was expecting news on this, by the end of the day. U.S. Chamber of Commerce is warning that small businesses cannot afford to wait for clarity and

certainty, telling White House officials, we are deeply concerned that even if it only takes weeks or months to reach agreements, many small businesses

will suffer irreparable harm.

Across the Pacific, Chinese State Media is saying that U.S. officials have reached out and that there is no harm in engaging with them. Joining me now

is Mary Lovely. She's a senior fellow at the Peterson Institute for International Economics. Thanks so much for joining, Mary. Always good to

talk to you.

MARY LOVELY, SENIOR FELLOW, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: You're welcome.

SCIUTTO: So, the warning signs are piling up. You have the Chamber of Commerce, which is clearly hearing from small businesses, warning about the

effect. GM saying tariffs could cost them up to $5 billion this year. McDonald's sales are down. GDP growth was down in the first quarter. And

now, you have basically shipping from China is about to fall off a cliff in the next week or so. Are we about to see enormous economic effects from

these terrorists, regardless of whether tomorrow or the next day or next week, a deal or two is announced?

LOVELY: Well, I think it's a very clever way to make economists look very smart, because economists have been warning about this for quite some time.

I think that whether it is an enormous shock to the U.S. economy, the estimates of these trade wars, which they're likely to be trade wars,

because we're expecting retaliation, at least from our biggest partners, the estimates are on the order of a few percentage points of GDP. But in

the short run, it is going to feel like a tsunami for consumers.

As you mentioned, we're seeing much lower shipments from China. So, we're not only going to see higher prices, we're going to see shortages.

SCIUTTO: The administration is selling this as short-term pain for long- term gain, but when I hear small businesses telling the U.S. Chamber of Commerce, you know, this is irreparable harm, when you speak to businesses,

when you speak to economists, and when you look at the numbers, is it plausible that this is just a short period and things reverse or that

perhaps a few trade deals will take away the sting of this and everybody will be happy, or are we talking about lasting damage and lasting economic

consequences here?

[18:10:00]

LOVELY: We are talking about lasting economic consequences. The U.S. economy will grow slower in the short run. We saw some evidence of that

already in the first quarter. We're going to see more in the second quarter but it's going to be permanently lower income moving forward as a result of

these tariffs, and there are going to be businesses, particularly small and medium businesses that are simply not going to survive.

Let's talk about the difference between big businesses and small businesses. We saw yesterday that the president announced that tariffs on

auto parts were going to be implemented, but that they wouldn't, quote/unquote, "stack" with tariffs on steel and aluminum, that say a

muffler coming in wouldn't be taxed on it from both the steel that's in it plus the 25 percent auto tax -- a tax on auto parts.

That doesn't mean that small businesses imports importing steel say to fabricate stairways or other things, aluminum, that they will receive this

type of exemption, they will not. And so, we may see lots of deals that help big companies, small companies are going to be hit in many ways that

we're just beginning to discover.

SCIUTTO: Mary Lovely, I'm sure we'll have you back to talk as we see these effects take place. Thanks so much.

LOVELY: Thank you.

SCIUTTO: Indonesia planning to increase its imports from the U.S. as it is one of the many countries now actively negotiating for a trade deal with

Washington. President Trump had announced a 32 percent reciprocal tariff on Indonesia, which he put on hold now until July. Southeast Asia's largest

economy had an $18 billion trade surplus with the U.S. for goods last year, this according to the U.S. Trade Representative's office. Despite new

tariffs, the Indonesian finance minister says the country's economic growth is expected to be around 5 percent this year.

Joining me now is an Anindya Bakrie. He's the chairman of Indonesia's Chamber of Commerce and Industry. Good to have you on. Thanks so much for

joining us.

ANINDYA BAKRIE, CHAIRMAN, INDONESIA CHAMBER OF COMMERCE AND INDUSTRY AND CEO, BAKRIE & BROTHERS: Thank you very much. Jim.

SCIUTTO: So, first question for you, just in general, the administration talks about positive progress in negotiations with a number of countries.

Are you -- is Indonesia seeing positive progress with the U.S.?

BAKRIE: I think, Jim, we are very optimistic because, currently, we have trade surplus about $18 billion, 1-8. And for the purposes of importing oil

and gas derivatives from somewhere else, we imported about $40 billion. So, we think the government has a way to balance the trade.

Now, the question for us from the Chamber of Commerce and Industry is how to enlarge the cake. So, that's why we are here to meet our counterparts.

So, today, we are meeting associations, also national export councils for soybean, wheat and also, dairy. We signed an MOU today because we know they

want to export more to Indonesia and we welcome that.

On the other hand, we hope when the trade is balanced, we can sell more of the footwear, garment, also electronics. But also, we want to show that we

are rich on critical minerals. This is something that we can offer on the table because we feel the over reliant to one country is not good for both

sides.

SCIUTTO: So, $18 billion trade deficit here. What are the keys to getting - - I mean, of course you want to sell more to the U.S. but you're also -- if Trump wants to get that deficit down, you're going to have to buy more from

the U.S. Is it largely gas, for instance, natural gas? What else?

BAKRIE: So, I think with LNG and oil, especially LNG from Texas, Oklahoma, for example, that will be more than enough to balance the trade, because as

I mentioned, $40 billion from somewhere else can be reallocated over here. But on top of that, soybean, wheat, cotton dairy will be also quite

interesting, right.

But I think the most important things to discuss between the two countries is not only the trade, but also the investments. There are a lot of

investments that already come to Indonesia, but a hundred billion dollars last year, half of it FDI. And we also welcome, actually, American

companies to do that and vice versa, we actually are looking into opportunities in the U.S. if such thing makes sense to build the, you know,

global supply chain for Indonesia.

SCIUTTO: If Trump -- as you know, President Trump looks at trade deficits as being to America's disadvantage. He looks at it as almost like a company

being in the red. If he remains fixated on that number, the math is such that Indonesia's going to need to buy a lot more from the U.S. as opposed

to the U.S. buying more from Indonesia. So, is there a way to make this a win-win for Indonesia?

[18:15:00]

BAKRIE: I think so. Right now, give and take, the total trade is about $40 billion in which we are surplus about $18 billion. My estimate in two to

three years, that $40 will become $80 billion. And they will be trade balance. Primarily to start with the oil and gas derivatives, but it will

also include a lot of the agricultural products.

But what's interesting is that tomorrow we are going to meet the U.S. Chambers of Commerce, who is just in your show today. What we are saying is

that, look, you know, we need to find sparring partners here to make sure that the trade grow. Because, for example, for electronics, garment,

footwear, it involves about 2.1 million jobs in Indonesia, vice versa, the soybean, wheat, and cotton, about half a million jobs for farmers, right.

So, I think those type of discussions are what makes it interesting in this relationship within Indonesia and the U.S.

And just one thing, Jim. Indonesia is the seventh largest economy in the world. PPP basis, right? It is the biggest country in Southeast Asia, and

we think the Indo-Pacific strategy within the U.S. and Indonesia will create a lot of win-win scenario.

SCIUTTO: China, in response to this, is portraying itself as the responsible trading partner and saying, the U.S. is not responsible. The

U.S. is targeting your countries with punishing tariffs. That's not how China's going to and operate in effect a sales pitch to countries,

including in Asia, including Indonesia. What's your response to that? Is China a more reliable trading partner?

BAKRIE: Well, first of all, we are one of those countries which have no enemies in general, and we don't take sides. We are the biggest country of

a non-block alliance since 50 years ago, and the same case right now. So, we always want to build bridges within the two countries, you know, whether

that's the U.S. or China, because we think more trades, more investment is the better, whether China has good relationship with us, sure. But we also

have good relationships with the U.S.

And we think -- we studied from lower base, Jim. You know, we have no FDA with the U.S., no limited FDA, no critical minerals agreement and we have

trade surplus. So, we think if we fix the trade surplus -- and by the way, rebalancing is not a bad thing in the world, it will create sustainability,

right?

Having said that, I think with the U.S., you know, we can do a lot of things in investments, in trade, in R&D. Please remember that half of the

cabinet in Indonesian right now we see they are actually American grads, right? So, there is a natural affinity for the U.S. and I think, the people

to people relationship can always be counted.

SCIUTTO: Well, unless those student visas come -- become harder to come by, we'll be watching that. Anindya Bakrie, thanks so much for joining.

BAKRIE: Thanks, very much, Jim.

SCIUTTO: We wish you good luck on the rest of your visit.

BAKRIE: Thank you.

SCIUTTO: Coming up, new tensions in an old conflict and a dangerous one. Military drills in India and Pakistan now. World leaders urging both sides

to show restraint after a deadly act of terrorism in Kashmir, which India is blaming on Pakistan. We'll take a look. Coming up.

(COMMERCIAL BREAK)

[18:20:00]

SCIUTTO: We're learning more about the minerals deal between the U.S. and Ukraine. Ukrainian president, Volodymyr Zelenskyy says it was a direct

result of his meeting with Donald Trump at the Vatican, you see it there. That was before Pope Francis' funeral.

It also appears that Ukraine wrangled more favorable terms out of the U.S. in this latest version of the agreement. Ukraine, for instance, is not

required to pay back the U.S. for the aid it has already received. On the U.S. side, the United States gets preferential rights to extract minerals

such as oil, natural gas, and copper.

Earlier I spoke to Yuriy Vitrenko, the former head of the Ukrainian energy company, Naftogaz. And I asked him whether he saw this deal as a win-win.

Have a listen.

(BEGIN VIDEO CLIP)

YURIY VITRENKO, FORMER CEO, NAFTOGAZ: It has a potential to be a win-win. Still, again, there is -- there are some risks. And again, it's more like a

framework agreement. So, a more detailed practical, technical agreement should follow, and it remains to be seen what will be there. But at least,

again, it has a lot of potential to be a win-win.

SCIUTTO: When we look at the oil and gas part of this, right, because initially the focus had been very much on rare earths, and that is still

part of this, but oil and gas are now included. What's the significance of that in your view?

VITRENKO: Yes. Now, it's about natural resources that, again, including oil and gas, including critical minerals and the rare earth minerals. The rare

earth is probably more like a future, I would even say a more distant future because even though, again, some estimate says that we have like $15

trillion worth of rare earth minerals in Ukraine, but nobody knows how much you need to spend to be able to extract this rare earth minerals. And you

need a lot of investments, a lot of time.

What is the most important thing, you need new technologies, otherwise, it won't be economically efficient. And the oil and gas, it's not like a

future, not even like a distant future. It's really what we are extracting now and what is very profitable at the moment. And there are investors

inside Ukraine and foreign investors, I know from my own experience, that are ready to invest in oil and gas production in Ukraine, even during the

war.

And also, again, in terms of like territories that are currently occupied by Russia, it's more about coal and some minerals, but less about oil and

gas. So, from that perspective also we have a lot to offer right now.

(END VIDEO CLIP)

SCIUTTO: The U.S. defense secretary spoke on the phone today with India's defense minister, as tensions have been surging between India and Pakistan

following last week's terrorist attack in Kashmir. Pete Hegseth expressed sympathy for the victims of the attack, mostly India nationals. The gunman

killed more than two dozen people in the Indian controlled section of the disputed region. New Delhi was quick to blame Pakistan, saying it played a

role in the massacre. Islamabad denies any involvement.

For nearly 80 years, Kashmir has been a flashpoint between India and Pakistan, fighting broke out as recently as 2019. But the two nuclear

powers were able to de-escalate before all-out war erupted. Both sides now are running military drills, as a top official in Pakistan says there is,

quote, "credible intelligence" India is now planning to attack Pakistan.

Aparna Pande is a research fellow at the Hudson Institute. Good to have you on. Thanks so much.

APARNA PANDE, RESEARCH FELLOW, HUDSON INSTITUTE: Thank you, Jim.

SCIUTTO: Is it credible that India is planning to attack Pakistan now in response?

PANDE: Jim, we have seen this film play out before, basically since 1989. Every few years a terror attack takes place inside India, which is almost

always linked to a Pakistan-based jihadi group. The two countries escalate tensions, and because they are nuclear armed neighbors, the global

community comes in to try and diffuse the crisis.

[18:25:00]

So, it is likely that India will seek a punitive action without making it necessarily escalatory. What we need to -- what we are not yet sure of is

whether the -- whether India will exercise strategic restraint as it did after the Mumbai attacks in 2008 or it'll implement a surgical strike like

in 2016 or an air strike like in 2019. If that happens, will Pakistan pretend, as it did in 2016, that nothing happened or retaliate as it did in

2019? As you know, it's difficult to calibrate a military strike between two nuclear armed neighbors.

SCIUTTO: No question. And of course, one person's reasonable or proportional retaliation could be another person's over retaliation.

PANDE: Absolutely.

SCIUTTO: So, how to lower the temperature here and how best to allow diplomacy to win out as opposed to escalation?

PANDE: So, the trick is that -- the trick for India is going to be, can it get its revenge without causing all-out war? The issue for Pakistan remains

that it needs to deal and tackle with the terrorist infrastructure, which it has -- which is inside its country, it's the terrorist safe havens, to

prevent any such future crisis. Otherwise, every few years we will be back to the drawing board once again.

The International Community also needs to assure India that it will not ignore Indian victims of terrorism just as it seeks retribution for Western

victims. And this is a tough thing as it'll also need to ask Pakistan to do more on the terrorism front.

SCIUTTO: Is an escalation toward all-out war an outlier at this point, or do you worry that the ingredients here are present and could lead to

something bigger than what we've seen in the past?

PANDE: As of now, I mean, I don't believe that the India and Pakistan are going to all-out war. And again, the reason is that the two countries,

every few years, go to what you and I would call brinkmanship. The terror attacks takes place, both sides ramp up and both sides put pressure on the

global community.

India wants the global community to call out Pakistan, because India sees this as a playbook that every few years, the Pakistani military has

domestic challenges and it -- so, it seeks to escalate with India through a terror attack.

Pakistan would like a resolution of the Kashmir dispute, which it believes will only happen if the domestic -- if the International Community applies

pressure.

SCIUTTO: Yes.

PANDE: And so, both go to brinkmanship to convince the global community to do something, which either side is not able to get that.

SCIUTTO: Goodness. I covered a similar situation it seems 20 years ago over Kashmir.

PANDE: Yes.

SCIUTTO: And history repeats itself. Aparna Pande, thanks so much for joining.

PANDE: Thank you.

SCIUTTO: Coming up, North Korea acknowledges it has joined forces with Russia against Ukraine. After the break, we're going to break down why now

and what's next?

(COMMERCIAL BREAK)

[18:30:00]

SCIUTTO: Welcome back to "The Brief." I'm Jim Sciutto. And here are more international headlines we're watching today.

A major reshuffle at the White House with President Trump removing his National Security adviser, Mike Waltz, tapping him to be U.S. ambassador to

the U.N. instead. Secretary of State Marco Rubio, he's going to be doing double duty now, taking over the national security adviser role while

keeping his post as secretary of state.

Protests around the world are marking International Workers' Day mayday, as it's known. In Buenos Aires, Argentina, a noisy protest called for new wage

talks. In Paris, French labor unions calling for demonstrations against the far-right there. And in the U.S. thousands of people across the country

protest President Trump's policies.

On day two of what's been known as the mushroom poisoning trial, it has gripped Australia. Simon Patterson, the estranged husband of alleged

murderer, Erin Patterson, took the stand. Jurors were shown texts in which he declined to attend a lunch, which was allegedly intentionally laced with

deadly mushroom paste, which then killed his parents and his aunt. According to the texts, his wife replied she was disappointed and has spent

many hours preparing the meal. Erin Patterson has always maintained her innocence and pleads not guilty to all charges.

Early this week, North Korea acknowledged it had deployed troops to Russia, acknowledging it for the first time. The admission follows months of

denials, despite what we saw. State media celebrated the soldiers, calling them heroes. Seoul says about 600 North Korean soldiers may have been

killed fighting for Russia in Ukraine with thousands wounded. Will Ripley has this report, which I like to warn you, does contain graphic images.

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): It was the worst kept secret of the war in Ukraine. For months, North Korea and

Russia denied teaming up on the battlefield, even as the evidence and casualties began piling up.

Ukraine said they had a hard time capturing North Korean soldiers alive, claiming they blew off their own faces with grenades, choosing death over

the risk of exposing the mission. Then seemingly out of the blue --

UNIDENTIFIED MALE (through translator): Comrade Kim Jong Un decided on our armed forces' participation in the war and informed the Russian side.

RIPLEY (voice-over): -- North Korean troops in Kursk honored on state TV. Praised as selfless warriors, shedding blood to defend a brother nation.

Kim Jong Un invoking a rarely cited mutual defense clause, saying Russian territory was under attack and North Korea answered the call.

RIPLEY: What other reasons would there be for both of them to reveal this essentially at the same time?

SHREYAS REDDY, LEAD CORRESPONDENT, KOREA RISK GROUP: Right now, the Trump factor is perhaps paramount. They've got a strong alliance. They have some

leverage.

RIPLEY (voice-over): That leverage may have come at a cost. Ever since Kim and Russian President Vladimir Putin signed their sweeping military pact in

Pyongyang, U.S. and South Korean officials say at least 12,000 North Korean troops have been rotated into Russia. South Korea's National Intelligence

Service estimates 5,000 North Korean casualties, including at least 600 deaths.

[18:35:00]

RIPLEY: Even in a country with such restrictions on information, North Korea wouldn't be able to hide that many casualties from its people.

REDDY: Definitely not. And that may have been a big factor in. Why they had to come clean.

RIPLEY (voice-over): CNN obtained handwritten battlefield notes from a dead North Korean soldier, revealing early days on the ground, filled with

loyalty but not clarity. Diaries from two captured North Korean soldiers revealed. many didn't know where they were or why they were fighting. The

North Koreans even carried notes about using soldiers as bait in a drone attack.

But Ukraine says the North Koreans are learning fast in real-time, mastering drone warfare, artillery coordination, 21st century battlefield

tactics, more valuable and deadly than decades of military drills. There's even talk of North Korean soldiers marching in Russia's Victory Day parade

next week. Whether or not Kim shows up, the message to Trump is clear, North Korea is no longer on the sidelines.

Will Ripley, CNN, Taipei.

(END VIDEOTAPE)

SCIUTTO: Coming up, shares of Apple and Amazon are under pressure in afterhours trading after they released results. We'll discuss what went

wrong with these two big tech bellwethers. That's coming up.

(COMMERCIAL BREAK)

SCIUTTO: Welcome back to "The Brief." U.S. Stocks kicked off a new month of trading with gains today. The NASDAQ rose more than 1.5 percent after

strong results from Meta and Microsoft. Despite today's gains, economic warning signs are on the rise. New U.S. jobless claims this week hit their

highest levels in two months and planned U.S. job cuts are up more than 60 percent compared to the same year -- period last year. All this before the

all-important monthly U.S. jobs report that's going to be out on Friday.

McDonald's also warned that consumers are pulling back on spending. The company's most important sales me metric fell more than 3.5 percent in the

first quarter. That is the biggest decline since the COVID pandemic.

Also, today, shares of Tesla fell a half percent. The company is denying a report in The Wall Street Journal that its board looked into replacing the

CEO Elon Musk amid slowing sales, as well as the controversy related to his work for the U.S. government.

[18:40:00]

Tech stocks could come under pressure on Friday's session after earnings just released by Apple and Amazon, both with good numbers overall. Though

Apple reported slower sales in China and pointed to costs from tariffs and the hundreds of millions of dollars. Amazon also reported weak guidance for

the current quarter due, once again, to tariffs.

Bob O'Donnell joins me now. He's the president and founder and chief analyst at TECHnalysis Research. Bob, good to have you on.

BOB O'DONNELL, PRESIDENT AND CHIEF ANALYST, TECHNALYSIS RESEARCH: Thanks, Jim.

SCIUTTO: So, first, put in context this Apple report that it'll take $900 million tariff hit in the current quarter. It's a big number for most

folks. How does it factor into their wider costs?

O'DONNELL: Yes, it's a great question, Jim, because people initially are going to hear that and they'll go, oh, my gosh, this is terrible. But, you

know, look, this is a company that in a typical calendar Q2 quarter brings in over $60 billion in revenue in hardware, which is where the tariffs will

hit. And don't forget, they have a huge services business that doesn't have any tariff issues.

And even their costs typically in this quarter have been in the 42-ish, 43 billion range. So, look, it's a big number, but it's still a small fraction

of what they've had over overall. So, it's not a doomsday kind of scenario, I think is the key takeaway. And that's why, you know, I don't think things

are quite as bad as the market is showing. You know, a lot of times the market react pretty quickly to things. We'll see how the stock actually

does tomorrow when the full market is open.

SCIUTTO: So, that $900 million, that's on the cost side. How about on the sales side?

O'DONNELL: Yes.

SCIUTTO: Both backward looking and more importantly, forward looking, because we really haven't seen the effects of the tariffs yet. Did Amazon

and Apple together show that there's -- they're going to take a hit coming forward?

O'DONNELL: Well, you know, Apple talked about having a revenue increase, as did Amazon. You know, it's always a question of degree. And so, the concern

is that we'll see a little bit less growth than perhaps we might have. But I think, honestly, these companies are just being cautious because they

need to be fiscally cautious in an era of complete uncertainty.

Apple had a bigger number than expected in this last quarter and they said it was not actually tariff driven. They think it was just general demand

was there, and similarly with Amazon. So, you know, up till now we've been OK. And I think this next quarter will be interesting.

To be honest with you, the bigger concerns in my mind are what happens in the second half of the year. But theoretically, by then, we'll know more

what the tariff policies actually turn out to be, what the macroeconomic situation is, et cetera.

SCIUTTO: Apple did confirm that most U.S. iPhones will now be, quote, "sourced in India." What does that mean exactly? Does that mean actually

manufactured because the bulk of their manufacturing does take place in China?

O'DONNELL: Yes. So, the final manufacturing of a lot of those U.S. bound iPhones will happen in India. But, you know, look, a lot of the parts are

made -- you know, TSMC is still building most of those -- the chips in Taiwan, they're going to start building some in Arizona, but you've got all

the other components.

I mean, there are hundreds of components in an iPhone. But at the end of the day, somebody has to put all those pieces together and that final

manufacturing will actually happen in India now for the U.S. market with the anticipation that we could see these China tariffs kick in and it would

be a better situation if they were built and coming in from India.

SCIUTTO: Bob O'Donnell, TECHnalysis Research, thanks so much for joining.

O'DONNELL: Thanks, Jim.

SCIUTTO: Japanese automakers, among the many, bracing for Trump tariffs. The U.S. and Japan are holding more trade talks today. Concern about

tariffs caused the Bank of Japan to slash Japan's economic growth forecast. CNN's Hanako Montgomery spoke to one local businessman who is now having to

revamp his operations.

(BEGIN VIDEOTAPE)

HANAKO MONTGOMERY, CNN CORRESPONDENT (voice-over): For 40 years, Hiromutsu Hamaguchi has run his car parts factory, taking pride in supplying major

Japanese automakers with parts used by drivers around the world. But with Donald Trump back in the White House, Hamaguchi says he's forced to try

something new.

HIROMUTSU HAMAGUCHI, CEO, HAMAGUCHI URETHANE (through translator): Rescue boats are something we manufacture entirely in-house with our brand name.

So, we can sell them ourselves. Right now, it makes up for about 5 percent of our total sales, but we'd like to double it to around 10 percent.

DONALD TRUMP, U.S. PRESIDENT: You got to see what's happening --

MONTGOMERY (voice-over): In his 100 days back in the Oval Office, Trump has driven the U.S. economy to the brink of a crisis and waged a tariff war no

country wants. A new executive order signed Tuesday eased some auto tariffs, but that help doesn't trickle down to small suppliers like

Hamaguchi who are struggling to stay afloat.

MONTGOMERY: Now, all the car parts being made here, like part of a car seat, headrests are all going to be 25 percent more expensive thanks to

U.S. President Donald Trump's new tariff on all auto imports. Now, that could be devastating for Japan's economy. About 3 percent of its GDP comes

from the auto manufacturing industry, and it also employs millions of people in Japan.

[18:45:00]

MAYU FUJIMORI, FACTORY WORKER, HAMAGUCHI URETHANE (through translator): If I lost this job, I'd have no choice but to look for another one, but I've

only ever worked in factories. So, I'm a bit worried about whether I'd be able to do something different.

MONTGOMERY (voice-over): Trump has threatened into auto tariffs since his first term, using them as leverage to cut deals with friends and foes

alike.

TRUMP: And I said one thing, you're going to have to open up your country because we sold no cars, like zero cars in Japan, and they sold millions of

cars into our country.

MONTGOMERY (voice-over): It's true that U.S. cars don't sell well in Japan, where only 0.3 percent of cars sold last year were American. But for very

good reason.

SANSHIRO FUKAO, EXECUTIVE FELLOW, ITOCHU RESEARCH INSTITUTE (through translator): American cars are large and have poor fuel efficiency. So,

fundamentally, their vehicle size doesn't fit Japan's road in traffic conditions. Cars are too big, for example. In Japan, highly fuel-efficient

cars like hybrids are mainstream, and American manufacturers often don't offer hybrid models.

MONTGOMERY (voice-over): As Japan's top tariff negotiator is in Washington for another round of talks, suppliers like Hamaguchi say a deal can't come

fast enough.

HAMAGUCHI (through translator): I want to say to Trump, please do it better. Don't be so intimidating.

MONTGOMERY (voice-over): Hanako Montgomery, CNN, Shizuoka, Japan.

(END VIDEOTAPE)

SCIUTTO: Still ahead. The startup getting ready to shake up the U.S. EV market. Slate Auto hopes to begin selling bare bones electric vehicles next

year that could cost consumers less than $20,000. We're going to speak to the CEO of Slate coming up.

(COMMERCIAL BREAK)

SCIUTTO: Tesla's sales slowdown of the controversy over CEO Elon Musk's work for the Trump administration have dominated the electric vehicle

headlines for months now, but that is overshadowing some more encouraging news for the U.S. EV market.

Let's take a look at the EV market in depth. New numbers show that U.S. electric vehicle sales jumped more than 10 percent in the first quarter

compared to last year. Kelly Blue Book says, roughly 7.5 percent of all U.S. vehicles sold in quarter one were electric. The Tesla Model Y and

Model 3 remained the bestselling EVs despite the controversy surrounding the brand, followed by the Ford Mustang Mach-E and the Chevrolet Equinox

EV.

Like all U.S. car companies, electric vehicles are exposed to Trump administration tariffs. According to data from Cox Automotive, some two-

thirds of EVs sold in the U.S. last year were made in the U.S. but all rely on imported parts, including, and this is key, batteries from China.

[18:50:00]

Amid this uncertain and highly competitive environment, EV Makers will hope to avoid the fate of Nikola, which filed for bankruptcy in mid-February.

Startups like Canoe and Fisker have also filed for bankruptcy. Companies such as Rivian and Lucid, however, remain operational despite their

challenges. Both are still racking up major losses.

Into the fray comes Slate Auto. It's a new EV firm hoping to begin selling a cheaper bare bones pickup truck as soon as next year. A truck which can

be converted into an SUV with a kit. It could sell for less than $20,000 if current incentives remain. Slate is backed by none other than the founder

of Amazon, Jeff Bezos. The company will build the vehicles in the U.S. in hopes to create thousands of jobs here.

Chris Barman is the CEO of Slate, and she joins me now. Thanks so much for taking the time.

CHRIS BARMAN, CEO, Slate AUTO: Hey, good evening, Jim. Thanks for having me on "The Brief." I'm excited to share some more about Slate.

SCIUTTO: So, first thing that jumps out to me is the sales price, $25,000. If those incentives stay in place, that could mean folks could pick up one

for about $20,000, well below the average for most EVs in this country. How do you manage that price point?

BARMAN: Yes, from the very beginning our focus was that we wanted to be able to provide a safe, reliable, and affordable vehicle to consumers, and

we're really focused on affordability without any compromise to safety and reliability.

So, what we've created and designed and will be manufacturing is a vehicle that's back to the basics. So, we wanted to make sure that what goes into

the vehicle is what an owner or consumer would need, but then we've given them the power of choice. So, then they can decide what accessories would

be placed on the vehicle, depending on their lifestyle.

So, like you mentioned earlier, the truck can be converted into an SUV. We produce it in a single configuration in a Slate gray color. And with that

though you can apply a wrap to get any one of a hundreds of -- or thousands of colors that you would want for the vehicle.

SCIUTTO: I have an EV myself, and I'll tell you the two most important things to me are range and charging network. So, what's the range and will

it have a good accessible charging network?

BARMAN: So, the range is on the base vehicle 150 miles of range, and most individuals drive about 37 miles per day in their commute. So, it allows

them a few days before they have to recharge the vehicle. If it is somebody who has a different cycle for their drive and they need to go a little bit

farther, 240 miles of range is what we also offer as an accessory battery.

The vehicle does have the NACS connector, or what many people know is the Tesla connector. So, it will be able to connect into the Tesla network.

SCIUTTO: As you know, President Trump himself has often attacked EVs as somehow un-American or hurting U.S. automakers, you know, gas powered

vehicles, et cetera. He does have, as you know, a Tesla CEO on his staff. So, I wonder if he's speaking in his ear. But do you worry that the Trump

administration will be a time for headwinds for EVs, that you just won't get the investments, the tax incentives, for instance, that you would've

had otherwise?

BARMAN: Well, I think, affordable vehicles are desirable for everybody. America is looking for more affordable vehicles. The average cost of a new

car today is $50,000. That's really out of reach for many people. And we've been focused on not only the design of affordable vehicle, but we also want

to re-industrialize America.

So, we've been designing and we will manufacture the vehicle here in Warsaw, Indiana, is where we will have our plant. And in addition to that,

the majority of our components are produced domestically. And you mentioned earlier in the segment about battery production. Our batteries will be

produced in the U.S. as well.

SCIUTTO: Before we go, listen, as with any startup, you often start operating at a loss. How soon do you expect to be making a profit on

vehicles?

BARMAN: Yes. We plan that within the first year of production we would see a profit on the vehicles.

SCIUTTO: And the first year is 2026?

BARMAN: Well, we launch start of production in Q4 of 2026. So, by the end of 2027 we predict or expect that we would be profitable.

SCIUTTO: Wow. Well, we wish you the best of luck. Chris Barman, CEO of Slate, and maybe I'll get a chance to drive one sometime.

[18:55:00]

BARMAN: We'd love that. Thanks, Jim.

SCIUTTO: All right. In sports now. English teams have dominated the first leg of the Europa League semifinals. Manchester United beat Athletic

Bilbao, 3-0. Putting that one there. Tottenham also won with three goals against the Norwegian Club Bodo/Glimt. Huge wins for both United and Spurs,

and they're having a miserable season in the English Premier League.

Well, in today's "Good Brief," the nominations are out for the 78th annual Tony Awards. The Broadway musicals, "Buena Vista Social Club," "Maybe Happy

Ending" and "Death Becomes Her" all led the way with 10 nominations apiece.

Audra McDonald was nominated for her role as Mama Rose in "Gypsy." It's her 11th nomination. That is the most in Tony history. George Clooney, on the

other hand, receiving his first Tony nomination for his role as Edward R. Murrow in "Good Night, and Good Luck." Cynthia Erivo will host the Tony

Award ceremony on June 8th at nowhere other than Radio City Music Hall.

Thanks so much for your company today. I'm Jim Sciutto in Washington. You've been watching "The Brief." Please do stay with CNN.

(COMMERCIAL BREAK)

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