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The Lead with Jake Tapper

Stocks Plunge As Trump Trade War Batters Global Markets; Canadian PM: Relationship With U.S. "Will Never Be The Same"; J.P. Morgan Upgrades Global Recession Risk To 60 Percent This Year; Trump Removes Multiple National Security Officials After Meeting With Far- Right Activist Laura Loomer; Trump Extends TikTok Ban Deadline For 75 More Days; Worst U.S. Economic Uncertainties Since COVID Outbreak. Aired 5-6p ET

Aired April 04, 2025 - 17:00   ET

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

KASIE HUNT, CNN HOST: They are the first born at the zoo in more than 150 years. The new mom, here she is, is known simply as Mommy. She's estimated to be just shy of 100 years old.

Take a look at this. This is a newspaper photo from 1932. That's when she arrived at the zoo as a young tortoise. So if you've ever been to the zoo, she has most likely been there. The hatchlings, they each weigh less than a pound. They'll be up to 250 pound when they're grown.

The team says they're still working on names. They might be all girls, but I still suggest Leonardo, Donatello, Michelangelo, Raphael. They're the newest celebrities anyway.

"The Lead" with Jake Tapper starts right now.

[17:00:46]

UNIDENTIFIED MALE: This is CNN Breaking News.

JAKE TAPPER, CNN HOST: And welcome to The Lead. I'm Jake Tapper. We're going to start with breaking news in our money lead with U.S. stock markets plunging, plunging for the second day in a row, all reaction to President Trump's tariff chaos which is continuing to wreak havoc around the globe. There's no nice way to say this, trillions of dollars have just been wiped out. And for most of you, thousands, if not tens of thousands of dollars are now gone from your retirement savings.

The Dow plunging this afternoon by more than 2,000 points. Two thousand points in one day. The S&P 500 and the Nasdaq both lost nearly 6 percent. The Nasdaq closed in a bear market for the first time since 2022, down more than 20 percent from its record high in December. The Dow posting its biggest back to back losses since March 2020.

March 2020. You know what that was? That was COVID.

As the U.S. market reels today, China is sitting back slapping a reciprocal 34 percent tariff on all imports from the United States, all imports starting on April 10th. President Trump lashing out on Truth Social writing, "China played it wrong. They panicked. The one thing they cannot afford to do," unquote. This comes with the news that it looks like inflation might be here to stay, at least for a while.

Federal Reserve Chair Jerome Powell said today that Trump's tariffs were, quote, "larger than expected and could well raise forever inflation." Powell therefore said he is going to keep interest rates steady for the time being. This announcement comes against Trump's urging as he posted on Truth Social minutes before Powell's announcement, calling on him to, quote, "Cut interest rates, Jerome, and stop playing politics," unquote.

Despite the economic blowback, President Trump says his tariff plan is, quote, "already working," unquote, with members of his party and his administration expectedly falling in line behind him. Secretary of State Marco Rubio shrugging off the market decline earlier today.

(BEGIN VIDEO CLIP)

MARCO RUBIO, SECRETARY OF STATE: The markets will adjust. Businesses around the world, including in trade and global trade, they just need to know what the rules are. Once they know what the rules are, they will adjust to those rules.

(END VIDEO CLIP)

TAPPER: This as new reporting from CNN's KFILE notes that Vice President J.D. Vance historically has opposed Trump's tariff policies going back to the first term. Look at many of Vance's speeches and social media posts from 2017 through 2020 showing Vance critical of the president's trade policies during that era. In one post, Vance warned Trump after he railed against America's trade deficits with manufacturing CEOs, quote, "Can't be repeated enough. If you're worried about America's economic interests, focus more on automation and education than trade protectionism," unquote.

CNN's Vanessa Yurkevich joins us now from the floor of the stock exchange.

And Vanessa, can you give us a gut check on how today fared compared to yesterday, which was yesterday was obviously the first day after Trump's tariff announcement?

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Yes, well it got worse today and the Dow closed down more than 2,000 points for only the fourth time in history. The Nasdaq is in a bear market and the S&P shed about $5 trillion worth of market value. And this is because of President Donald Trump's trade war. Investors are essentially pricing in right now the worst case scenario because they're not hearing any negotiation from the president with other countries to deescalate this trade war.

One analyst, Dan Ives from Wedbush said it best really on social media this morning kind of summing up what he feels like is going on. He said essentially that this is the worst thing he's seen in 25 years covering markets. He pointed to the dot-com bubble, the financial crisis and COVID because he says that this is self-inflicted and that this did not need to happen. Investors yesterday were digesting all of the tariffs that President Trump announced on other countries and today they were bracing for retaliatory tariffs. And they got one from one of our biggest trading partners, China.

A 34 percent tariff announced by China on U.S. exports. And ultimately even a solid jobs report this morning could not turn the tide of the markets. One investor I spoke to said that consumers vote, this is how Wall Street votes. And this is not a good vote of confidence, Jake.

[17:05:12]

TAPPER: And Vanessa, obviously we're heading into the weekend, so there won't be any trading for a little bit. Do you have any sense of when the markets might stabilize?

YURKEVICH: Well, President Trump hopes that the markets will stabilize or return to some sense of normalcy, but that's not what I'm hearing from investors. They believe that the only way markets are really going to stabilize is if Trump repeals some of these tariffs. I spoke to one analyst just before coming on air and asked him what does the next month look like? And he says that if we do not get a de- escalation or repeal of tariffs by the president, then we are, and I can't actually say what he said to me, but he used an expletive. We are expletive.

So investors really thinking that this is going to go on for quite some time. But until they hear something from the president about a de-escalation that could actually turn the market really quickly, Jake. But they're just not seeing that right now. Jake.

TAPPER: He said, did it start with an F and end with an act?

YURKEVICH: It did, Jake. Good call.

TAPPER: All right.

YURKEVICH: Yes, it did.

TAPPER: Vanessa Yurkevich, it's on the stock exchange. Thank you so much.

Let's TURN now to CNN's Phil Mattingly.

Phil, I want to go back to Federal Reserve Chair Jay Powell's decision today to keep interest rates steady as Trump is posting on Truth Social, calling on him to lower rates.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, I mean, I think it was even more pointed than that, Jake, in the sense of this wasn't even an FOMC meeting. This was the Federal Reserve chair giving a speech and taking a Q and A. First time he'd been in any public place since the tariff actions. And he made very clear he believes the economy and the Fed's posture right now and the economy is in its proper place at the same time Donald Trump was, as he did in his first term, jawboning, trying to get him to reduce rates or drop rates.

Next FOMC meeting is not until next month, I believe, at this point in time. So there's no emergency meeting planned. I think the more important thing when it comes to the Fed and when it comes to what we heard from Jay Powell today is he made very clear the uncertainty that is consuming the markets is still consuming the markets.

Jake, in the lead up to the announcement in the Rose Garden by President Trump, the one thing you kept hearing from White House officials was when need to get this done. So the uncertainty starts to dissipate. People are just going back and forth and back and forth every single day. And that is having a little bit of a destabilizing effect in terms of paralysis, but also getting in the way of their broader market or their broader economic agenda, particularly on the tax cut effort that they've got on Capitol Hill. The opposite has happened in the wake of the announcement.

And Powell made very clear today, not only do they not know how this is going to look going forward from a policy perspective, they have no way of kind of forecasting it from a macroeconomic perspective, given the lack of precedent.

TAPPER: So, I mean, obviously we quoted what J.D. Vance was saying back in 2017, '18, '19, '20, about manufacturing jobs, President Trump has the lofty goal of having these manufacturing jobs returned to the United States. And, you know, it's a great goal. But J.D. Vance was saying, you know, don't look at protectionism as the way to do that. Look at automation and look at education as the keys. President Trump is trying to break the global world order.

Is he doing this the right way?

MATTINGLY: Is -- well, I think the way you probably frame it, and I think it's worth noting that J.D. Vance has actually become a very influential voice behind the scenes in the economic team and as they push forward in these proposals and has been one of the, I think, more effective when you talk to White House officials, public messenger about what they wanted to do here and how they wanted to do it. And he was not taking a minimalist approach. He was on the maximalist side in his public commentary and explanation.

I think the way to look at that is it's kind of a false choice in the sense of if you're going to break the global economic system as it's existed over the course of four or five decades, I don't know that there is necessarily a right way to do that. And I think when you hear administration officials acknowledge there's going to be some pain, there's going to be some disruption, this is going to take a little bit of time, that is an acknowledgement of that reality. I think the question right now that they're grappling with, they're not trying to move off this plan. They still very much believe in what they're doing and thought through it over the course of several years before getting to this point is how do you calm the markets down? What message do you need to send?

And I don't know if there's been a great answer to that yet.

TAPPER: Markets down 2,231 point just today. Phil Mattingly, thanks so much.

Canada slamming the United States because of President Trump's widespread tariffs, with Canadian Foreign Minister saying that the relationship with the United States will, quote, "never be the same." This comes on the heels of Canadian Prime Minister Mark Carney almost mourning. He sounded doleful about the U.S.-Canadian relationship.

(BEGIN VIDEO CLIP)

MARK CARNEY, CANADIAN PRIME MINISTER: The system of global trade anchored on the United States that Canada has relied on since the end of the Second World War, a system that, while not perfect, has helped to deliver prosperity for our country for decades, is over.

(END VIDEO CLIP)

[17:10:02]

TAPPER: As a response today, Canada enacted reciprocal tariffs against the U.S. enacting a 25 percent tariff on cars and car parts. With me now to discuss is the Canadian ambassador to the United States, Kirsten Hillman.

Ambassador Hillman, it's always good to have you here. A few weeks ago, your country was ready to shut off electricity to some American cities, but instead, Canada chose to enact tariffs on cars. Can you walk us through the decision making, why you did this as opposed to something that might have been more shocking, more consequential, like turning off the -- turning off the lights?

KRISTEN HILLMAN, CANADIAN AMBASSADOR TO THE UNITED STATES: Yes. Thanks, Jake, and thanks for having me. It's important for us to approach this moment in time in a way that shows Canada and Canadians and the Americans that we are going to stand up for Canadians. But at the same time, it's important for us not to escalate to a point where we don't find ourselves able to have an off ramp or a conversation with the White House. And so, what we did yesterday was we enacted -- we mirrored the U.S. tariffs on automobiles. We have a deeply integrated auto sector with a few exceptions.

So we actually aren't putting tariffs on parts because we import a lot of American parts from West Virginia, from Michigan, all over the place. And we want those relationships to continue. So we are putting the tariffs on automobiles imports and we are also not putting the tariffs on any Mexican components in those automobiles because Mexico hasn't tariffed us. We are in the USMCA partnership and we want to make sure that we are not, you know, inadvertently hurting our Mexican partners as well.

TAPPER: Do you think your country is -- how much is it factoring into your actions, the degree to which Canada actually made out better than some other countries when you look at what President Trump brought to the fore the other day?

HILLMAN: Well, yes, it's true that on Wednesday we didn't get any new tariffs, but let's not forget the auto tariffs came into place that parts tariffs are coming in. We have tariffs on steel, we have tariffs on aluminum, aluminum products. And it's having a consequence. We have -- we used to have 99 percent tariff free trade a couple of months ago. Now a big portion of the trade between our two countries are under tariffs and we're seeing it.

Stellantis shuttered a plant, suspended operations. Nine hundredAmericans lost jobs because of that and many more in Canada. So these are real world consequences to these actions. And again, what we are looking forward to and hoping we will see soon is a comprehensive discussion around the Canada-U. S trading relationship, which is changing. It's clearly changing.

TAPPER: Is there a scenario in which Canada would negotiate with President Trump to lower tariffs?

HILLMAN: So we again, under USMCA, 99 percent tariff free. We have a tariff free --

TAPPER: USMCA, we should note, that's the new NAFTA, the new trade agreement between Canada, the United States and Mexico, which was President Trump's achievement.

HILLMAN: Absolutely. Absolutely.

TAPPER: Yes.

HILLMAN: And an important modernization of NAFTA. But now we're facing a sort of a different objective. The president has a transformational objective for trading relationships between the United States and trading partners. As he is implementing that transformational agenda, the relationship that we have with the country, our economic and trade relationship, will transform. So those rules will have to, you know, presumably change along with it.

We're looking forward to having that conversation. We're in an election period right now in Canada. So that more comprehensive conversation which the President has said he wants will happen after our election.

TAPPER: And this just in. CNN's Kayla Tausche just reported that a source says President Trump is in touch with representatives from Vietnam, from India, from Israel to negotiate trade deals that could alleviate these proposed tariffs in advance of a deadline next week. Do you have any idea if there's going to be any such discussion with Canada. Any plans to have those conversations?

HILLMAN: Well, so the tariffs that were imposed yesterday, these reciprocal tariffs, they don't apply to Canada, they don't apply to Mexico.

TAPPER: Right.

HILLMAN: So we're not in a position to be working towards those discussions. We have had a discussion with the president around starting a comprehensive conversation post the Canadian election with whoever is running our -- you know, is leading our country at the time. We will look forward to that. And in the meantime, you know, we would urge restraint. A lot of Canadians and Americans are going to lose their jobs, and that is not what we want to see happen.

We'd like to see if there is a rethinking of the way in which our relationship is going to happen in the trade space, which clearly that's what the president wants, then we'd like to see in a way that minimizes harm to workers in the United States and in Canada.

TAPPER: All right, Ambassador Hillman, thank you so much. Really appreciate your time.

Today, the stark warning from JT -- J.P. Morgan about Trump's tariffs, quote, "There will be blood," unquote. The company now warning of an even higher chance of a global recession this year and its chief economist is going to join us to explain why they feel that way. That's next.

Plus, the leader of one of the United States most powerful spy agencies has been shown the door and kicked out of his job. What we're learning about why he was fired and the individual who might be responsible.

[17:15:03]

Stay with us.

(COMMERCIAL BREAK)

TAPPER: And we're back with more on the breaking news in our money lead. A massive stock selloff around the world today, including in the United States, the result of President Trump's tariffs. J.P. Morgan took the rather dramatic step yesterday of updating their assessment of the chances of a global recession. It went from 40 percent to 60 percent. That means it's more likely than not, in J.P. Morgan's view, that the United States will experience a recession this year.

A screenshot from J.P. Morgan's memo yesterday shows the headline, quote, "There will be blood." With me now to discuss is the managing director and head of economic research for J.P. Morgan, Bruce Kasman.

Bruce, thanks for joining us. So what led you to take this dramatic step to revise the chances of recession to 60 percent?

[17:20:02]

BRUCE KASMAN, MANAGING DIRECTOR & HEAD OF ECONOMIC RESEARCH, J.P. MORGAN: I think there are three things here. Let me say first off that I think the economy is actually doing reasonably well as we move through the first quarter, I think something you see in today's employment report. However, first and foremost, what we saw with Liberation Day was an extremely large tariff increase. And we should understand that a tariff increase is a tax on U.S. households and businesses. That roughly 22 percent cumulative tariff increase we see would be the largest U.S. tax hike we've had since 1968.

It's a big hit to the economy in a direct sense. The second thing is the design of the tariff was not meant to tactically go against unfair practices abroad. It was basically putting tariffs on countries based on their bilateral deficit with the U.S. And in doing so, what you're doing is effectively creating a situation where you're targeting those things that Americans buy, regardless of the cause of that. You're creating an opportunity for large disruptions and I think significant retaliation as well.

And perhaps as important as anything, we think what's going on here, not just with trade policy but with other policies as well, is we're seeing an administration that is shifting the sentiment of the business sector away from its view, which I think was in place at the beginning of the year, that this administration cared about near term growth, cared about the business sector. And that momentum shift in terms of sentiment is what's reflected in the markets this week.

TAPPER: As long as I have your expertise, let me ask you to explain something for our viewers because you said that the tariffs were assessed in large part based on the trade deficit the United States had with countries. So for instance, if the United States buys $100 million a year of goods from Wakanda, and Wakanda only buys $5 million from the United States, that's a huge trade deficit. But it's not necessarily because of unfair trade practices. It might just be that Wakanda has a fraction of a population compared to the United States, right?

KASMAN: There's a whole set of things that determine what trade balances are. I mean, I think -- let me give you a very simple example. Let's say we live in a village and I'm a baker, you're a grocer, there's a plumber, so on and so forth, you may want to spend only what you earn, but that doesn't mean you're going to spend with the baker and the grocer and so on so that you have a balance of what they're spending with you is. Those things just don't have any real logic behind them in a macroeconomic sense. And I think that's true in terms of the design of this tariff plan.

TAPPER: President Trump posted on Truth Social today, "Great job numbers. Far better than expected. It's already working. Hang tough. We can't lose."

Just to be clear, this job numbers are from March before Liberation Day. So is it an accurate assessment to say it's already working?

KASMAN: No, not at all. I would say that there is a reflection in the job numbers of an economy that turned into the New Year with expectations relatively optimistic that while the Trump administration would do some, you know, fairly large changes in policy, that it would still be committed to supporting growth in the business sector. That I think is in the March numbers and I think is being lost now as we're making our way through March and April in sentiment and financial markets.

TAPPER: The president also said this today, quote, "To the many investors coming into the United States and investing massive amounts of money, my policies will never change. This is a great time to get rich, richer than ever before." Is this President Trump trying to assure people that there will be stability? How do you interpret this post?

KASMAN: I'm not going to go to try to kind of interpret everything the president is saying. What I do want to say is if we sustain these policies through the rest of the year, we will do damage to the U.S. and the global economy and most likely throw the U.S. into recession.

TAPPER: Stocks have been plunging for two days. I mean plunging, 2,000 -- more than 2,000 point loss today. How long do you expect this to be going on? How long could it go? How low could it go?

KASMAN: Well, I think if we are going into recession, we haven't seen the bottom of the stock market. Stock market declines can be pretty substantial. I think a question to ask is whether there'll be any cost correction in policies. I would want to emphasize here that the transmission of tariffs to the U.S. economy and the drag comes through higher inflation. So don't expect the Fed to come in very quickly unless there's some real breakdown in credit and funding markets that's accompanying the stock market decline.

TAPPER: And lastly, Bruce, who is this hurting right now? Obviously, I'm not going to take a look at my 401k for quite some time. And your portfolio, I suspect you're not eager to dive into it every day. But, but you and I can afford to be patient about this. Who is being hurt by this right now?

[17:25:02]

KASMAN: Well, I think again the policies were announced this week. I think what we will see over the next two or three months is U.S. inflation move above a 5 percent annualized pace. I think what we will see is disruptions in supply chains. I think it will become more expensive for companies to source materials. And those things together I think will work both to slow spending.

Hit the job market. And again if we don't change course, I think throw the U.S. into recession as we go through the rest of this year.

TAPPER: Yes, the worst two days on the stock market since COVID hit is not a small thing. Bruce Kasman, thank you so much. Appreciate your time.

Imagine if the head coach of your favorite team set the lineup based on the advice of a super fan with no experience, questionable motivations. Sounds crazy, but it seems like that's maybe what's going on with the United States head coach. President Trump hearing from super fan Laura Loomer. We'll explain next.

(COMMERCIAL BREAK)

[17:30:22]

JAKE TAPPER, CNN HOST: In our Politics Lead, shocking news about President Trump firing members of his national security team. General Timothy Haugh was fired on Thursday. Haugh had held two jobs, director of the National Security Agency, one of the government's most powerful and critical spy agencies. He was also head of U.S. Cyber Command, the military's offensive and defensive cyber unit. The general was rather gracious about it. In a farewell note to the staff obtained by CNN, General Haugh wrote, quote, I ask you to support the President and keep after our nation's priorities, unquote.

His deputy was also dismissed, as were at least four other National Security Council staffers. But even more shocking than these firings was the apparent reason behind the firings. Apparently, far-right conspiracy theorist Laura Loomer did not like these gentlemen. Loomer was seen at the White House on Wednesday where she had an audience in the Oval Office with President Trump. Here's what he said about her yesterday.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Laura Loomer is a very good patriot. She is a very strong person. And I saw her yesterday for a little while. She has make -- she makes recommendations and things and people. And sometimes I listen to those recommendations like I do with everybody. I listen to everybody and then I make a decision. Always we're going to let go of people, people that we don't like or people that we don't think can do the job or people that may have loyalties to somebody else.

(END VIDEO CLIP)

TAPPER: We should note, Laura Loomer's expertise is decidedly not in national security. Laura Loomer's expertise is in trafficking in far- right conspiracy theories. In June 2023, Loomer shared a post on Twitter that included a video with the title 9/11 was an inside job, though she later denied that she had said it was. The self-described proud Islamophobe celebrated on Twitter in 2017 when hearing of refugees drowning in the Mediterranean.

Good. Here's to 2,000 more, she wrote. Last year, she predicted that if Kamala Harris, whose late mother was an Indian American, if Harris had won, quote, the White House will smell like curry and White House speeches will be facilitated via a call center, unquote. So in addition to being an odious racist, Loomer is also a longtime Trump fan and she seems to think the aforementioned national security experts had a glaring deficiency, which was disloyalty to Trump.

This is the person who apparently now holds sway over national security and cybersecurity, at least in terms of personnel. Joining us now is an actual expert in national security, CNN global affairs analyst Brett McGurk. He was the National Security Council's coordinator for the Middle East and North Africa during the Biden administration and served both for President Trump and President Obama as a special presidential envoy.

Thanks for joining us, Brett. Good to have you. So apparently Loomer told the President that General Haugh specifically should be fired because he had been handpicked by former chairman of the Joint Chiefs of Staff, Mark Milley, and there's no love lost between Milley and Trump. But what are your thoughts on this?

BRETT MCGURK, CNN GLOBAL AFFAIRS ANALYST: I tell you, Jake, you know, I served for four years in the National Security Council of the White House with George W. Bush. I served for four years in the National Security Council with President Biden. I've been a presidential envoy for Trump and Obama.

I taught National Security Council decision-making at Stanford. I've never seen anything like this. I've never heard of anything like this. And the fact that Mike Waltz, the National Security Advisor, who, look, I think we want him in the White House. He's a lot of experience. But he was in the Oval Office as his staff, as people he picked are being fired. And he didn't stand up for his staff. He wasn't able to protect his staff.

I just think that puts the National Security Advisor in a totally untenable position. It talks about a breakdown in our national security decision-making as the world's approaching this major economic crisis, which is self-inflicted. I think it's incredibly serious. But it speaks to kind of a broader problem, I think, within the overall national security apparatus.

TAPPER: And, well, that broader problem I wanted to ask you about because we're told by some current and former defense officials that there's this growing culture of fear among the officer ranks within DoD, at the National Security Council, who worry that at any moment they could be fired or had their loyalty or patriotism challenged because of, you know, I'm -- I'm trying to be nice here. She's a far- right conspiracy theorist. It's the nicest thing I can say about her.

MCGURK: Look, I'm trying to be dispassionate here, too. I'm nonpartisan. But even in just kind of studying group dynamics and leadership and decision-making, there's something called the effectiveness trap. And what it means is you kind of get a sense that to be effective, I need to be in the room. And to be in the room, I need to say what the leader or whoever my boss might think. That is how you get into really bad decision-making. That is how we've seen this before in our history.

TAPPER: So it's just yes men, yes men, yes men.

[17:34:59]

MCGURK: And then you can also think, well, it's better for me to be there than not be there so you stay in your job and you're not actually giving your sincere advice. Look, I've been a senior director on the National Security Council under two administrations. You want to be to tell the National Security Advisor or the President exactly what you think.

TAPPER: Including when they're wrong.

MCGURK: Yeah, if you're shading your views that you're not serving the President and the National Security Advisor can't do his job effectively.

TAPPER: So in other news, the Acting Inspector General of the Defense Department announced that they're going to review Secretary of Defense Pete Hegseth's use of signal in that group chat that Mike Waltz started. That was a big story last week. What -- what do you expect the investigation to show?

MCGURK: Look, I think it's -- it's good that the Inspector General, I guess an Acting Inspector General is looking at this. Look, I -- I helped develop this Houthi campaign that they're carrying out now. You know, in the Biden administration we did about a thousand strikes against the Houthis. We were striking them almost every day.

But over the last really 90 days of the Biden administration we developed a very comprehensive campaign plan. That is like very rigorous intelligence work, rigorous military planning. We handed that off during the transition actually to Mike Waltz and the team. That's what they're carrying out now. I know a lot about it.

To read in the newspapers or in the press or in Atlantic the kind of the details of that campaign, not just that night of strikes, but also patterns of life of per -- persons you might be targeting. That is unquestionably classified information that should not be on a signal or on somebody's phone. And it's problematic.

I think everybody involved would have been well served to say, look, we made a mistake here that won't happen again. But claiming it's not classified and it was OK, I think that makes it worse. And I expect the Inspector General will come to that conclusion.

TAPPER: Is the campaign being successful? Is it successful? And why weren't more of the -- I mean, is Trump hitting the Houthis more than Biden did?

MCGURK: He is pursuing, look, this kind of started actually in the -- in the -- in the final months of -- of the Biden administration. But we didn't really kind of beat our chest about it. We did a strike on December 31st against, we said publicly, a command and control center that was against some of the leaders of the Houthis. So they're accelerating that campaign. It was put together in the Biden administration. Actually, I fully support it.

I want it to succeed. But make no mistake, it is going to last for months. As CNN reported, as "The New York Times" reported today, it's a campaign that is probably going to go on for the next six months. That's as it was designed. And in that signal discussion, what was interesting was that it wasn't really clear whether they had really made that clear to the President.

Do you understand what we're getting into? This is a multi-month campaign. It could lead to strikes against Iranian targets. That's where this might lead. Now, again, so far, they're executing it. I think CENTCOM is doing a professional, doing a great job. But this is going to go on for some time. What was interesting in that signal chain also, the joint staff was not on that group.

TAPPER: Yes.

MCGURK: It's the joint staff in the Pentagon that kind of says, hey, wait a minute, we have -- we have global responsibilities. We might want some resources here or there. It's important to have that debate before you launch a campaign. And I'm not sure that debate was had. Again, I -- I support the Houthi campaign. It's something that was put together under the Biden administration.

But it is something that you have to carry out with discipline and skill over the coming months. And again, that's why you need a strong national security advisor, a strong national security council. And the news of the last few days suggests that might not be in place.

TAPPER: All right, Brett McGurk, thanks so much. Come back. We want to talk more about this.

[17:38:12]

TikTok was set to be banned in the United States for a second time in just hours. But today, a last second break for the popular app. How long and what happens next? We'll break it all down. Stay with us.

(COMMERCIAL BREAK)

TAPPER: In our Tech Lead, President Trump announced today that he is once again extending the deadline for TikTok to sell and avoid being banned in the United States. The law passed by former President Joe Biden required TikTok's China-based parent company ByteDance to divest or face a ban in the United States. Trump's previous extension of 75 days was set to expire tomorrow.

CNN's Clare Duffy has the latest. Clare, where do negotiations stand currently when it comes to getting ByteDance, with permission of the Chinese government, one expects to hand -- hand over TikTok to someone else?

CLARE DUFFY, CNN BUSINESS WRITER: Yeah, this is really interesting, right? Because both President Trump and Vice President Vance had said in recent days that they did expect a deal to happen by this Saturday deadline. Trump is now saying that more time is needed to reach that deal, but that he does not want TikTok to go dark.

And what we're hearing from a source familiar with the conversations within the White House is that there was actually a deal in place ready to go this week, that ByteDance and U.S. investors and the Trump administration staff had all been on board, and it was ready for Trump to certify. And that deal would have given U.S. investors majority control of TikTok's U.S. operations, leaving ByteDance with just a 20 percent stake. But then Trump announced this 34 percent tariff on China. And ByteDance representatives essentially came to the White House and said, the Chinese government is not going to approve of this deal as long as these tariffs are in place. So that really appears to have derailed this deal that was ready to happen by tomorrow.

TAPPER: ByteDance had not expressed any intent to sell before. Has anything changed about that?

DUFFY: Yeah, it appears that it has changed, and ByteDance is actually acknowledging today publicly that it is in talks with the Trump administration to make a deal happen for TikTok U.S. A spokesperson saying that an agreement has not been executed because there are still key matters to resolve. The spokesperson also said that China will have to approve this deal. And so I think that is the big question now, is can Trump get this deal back on track despite this escalating trade war? Can he convince China to approve of a deal to sell TikTok?

TAPPER: All right, Clare Duffy, thanks so much. Appreciate it.

[17:44:55]

The last time we saw this much economic uncertainty was five years ago during the COVID outbreak, March 2020. Did we learn any lessons then to help us navigate it now? That's next.

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TAPPER: President Trump's tariffs are causing high levels of economic uncertainty in the United States that we have not seen since March 2020. That's the start of the COVID pandemic lockdowns in 2020, according to the Economic Policy Uncertainty Index. Those initial lockdowns, although people were saying it was important when it came to saving lives, they also had costs. Public health policies we were asked to abide by, one wonders what the effect would be on the economy, on our mental health, on the education of our kids, and so much more.

[17:50:20]

There's a new book called "In COVID's Wake: How Our Politics Failed Us" that examines all that and more. And -- and joining us now are the authors, Princeton University professors, Frances Lee and Stephen Macedo. Stephen, I remember just poking my head up during COVID coverage and saying, are we really sure we should be closing the schools? And I was bombarded with tweets from teachers. I wanted to kill them. Were you worried at all about writing this book, about people saying, you know, what are you doing?

STEPHEN MACEDO, CO-AUTHOR, "IN COVID'S WAKE: HOW OUR POLITICS FAILED US": We were. And we worry about it, especially with the current attacks on the university, and attacks on science, and defunding, and so on. But we think that, you know, a premise of those attacks is that universities are politicized, science are politicized, and if we're not willing to ask hard questions, you know, then we -- we would tend to support that -- that premise.

And we think by asking hard questions, being willing to address hard questions, and admit past mistakes, we'll help to defy that premise and improve.

TAPPER: Yes. There needs to be a reckoning. And -- and let's talk about the education thing, because it seems like kids are still reeling from this, right? These NAEP scores didn't go down just on their own. I mean obviously, the United States has been struggling with education for a while, but how much do you think some of the struggles we're seeing in our schools today are because of schools being basically, let's shut down. I mean, this virtual learning, I -- I -- I have skepticism. I'm skeptical of how much it did anything. FRANCES LEE, CO-AUTHOR, "IN COVID'S WAKE: HOW OUR POLITICS FAILED US": So we have seen unprecedented drops in a -- in student learning since the pandemic. So the -- the -- the -- the -- the time series is quite remarkable when you look -- when you look at the indicators and the -- the -- the severe damage that was done to student -- student -- student learning in the aftermath. But there has been a lack of recovery in great part because absenteeism from school has also skyrocketed in the wake of the pandemic.

TAPPER: Why do you think that is?

LEE: It's basically doubled nationwide. I think people began to feel, young people and parents began to feel that attendance at school was to some extent optional. And so -- I mean, people's habits changed in many ways during the pandemic, including young people. And so it's hard to catch up on lost learning when you're actually attending school less than you had before.

TAPPER: One of the ways I kind of look at young people today, and I do not mean this in an unsympathetic way, I mean it entirely sympathetic, is I almost feel like they're emotionally about two or three years behind where people 20 years ago would have been. Whether like so a -- so a college freshman at age 18 might really emotionally be at about a 16-year-old level. Is -- is that fair?

MACEDO: Well, I mean, we've seen some of that. Our students are very privileged at Princeton. We both teach at Princeton University.

TAPPER: Yes.

MACEDO: So, you know, I think our students have done a good job of recovering. But as Frances said, there is plenty of evidence of -- of higher rates of depression, absenteeism, and another very sad thing here is that this was all predicted in pre-COVID pandemic planning documents. There were vivid warnings of the cost of these measures that we implemented, including school closures, and those measures, those -- those pre-COVID pandemic plans, said that they were extremely unlikely to be effective at curtailing the amount of mortality from COVID, the amount of morbidity from COVID. So we didn't pay attention to those, which is a real shame.

TAPPER: Frances, one of the things, one of the moments I had personally, a real crisis of faith in our health institutions and medical institutions, when after the George Floyd protests, and look, the murder of George Floyd was a horrible -- horrible moment, and I'm -- I'm -- I'm glad that there was awareness to brutality and all -- and all the rest and racial inequities. But all of a sudden, even though kids weren't allowed to go to school, playgrounds were locked up, people weren't allowed to go to beaches, et cetera, et cetera, all of a sudden medical organizations were saying it was OK to gather in large groups in tight spaces to protest racial injustice. And just as a -- as a medical justification, that didn't make any sense to me.

LEE: That was a time when many people began to question the -- the mandates and to wonder why one could go to the liquor store or and -- or go to the casino and -- and not go to church. You know, the -- the -- the -- the rationality of a lot of the -- the -- the restrictions began to be questioned. You began to see, that's in the summer of 2020, that's when the pandemic begins to polarize along partisan lines.

It was not party polarized initially. Initially there was broad adherence to the early recommendations for closures --

TAPPER: Yes.

LEE: -- so starting in mid-March. It's -- it's over the summer when you begin to see the states go their different ways, your red states going one way, blue states going another. And so then that partisanship begins to structure the response to the -- the -- the response to the pandemic after and public opinion around the pandemic. And so the kinds of questions that were getting raised around the -- the -- the Floyd protests, that's -- that's just one set of questions.

[17:55:18]

TAPPER: Yes.

LEE: There were many others that tended to break along partisan lines.

TAPPER: I could spend five hours talking about this with you guys, but instead I'm going to read your book. It's called, "In COVID's Wake: How Our Politics Failed Us." Professors Frances Lee and Steven Macedo, thanks to both of you. And thanks for writing this book.

MACEDO: Thank you Jake.

TAPPER: Really, really important. The country needs a reckoning on a lot of these things.

A major development in court today in the case of a man that the government admits had mistakenly deported to El Salvador. The new order from a judge, that's ahead.

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