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China Fires Back, Slaps 34 Percent Tariffs on U.S. Imports in Retaliation; Trump Says Things "Going Very Well" After Markets Plunge; Pentagon IG to Review Hegseth's Use of Signal Chat. Aired 8-8:30a ET

Aired April 04, 2025 - 08:00   ET

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

[08:00:00]

ALEX MARQUARDT, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Kremlin aide, that Putin advisor, Kirill Dmitriev, who has been in Washington this week, we knew that Dmitriev had been meeting with the envoy, Steve Witkoff.

Rubio now admitting that he also met with Dmitriev. And I asked him what the message that he gave to Dmitriev was, and he said that the U.S. really needs to know, as they try to broker this ceasefire and a peace deal in Ukraine, whether Russia is indeed serious about peace. And Rubio indicated that the clock is ticking. Here's a little bit more of what he told me.

(BEGIN VIDEO CLIP)

MARCO RUBIO, SECRETARY OF STATE: What we're not interested in -- and I'm not accusing them of this, I'm just telling you, what we're not interested in is negotiations about negotiations, that we're not going to continue this forever. So none of it was threatening. I think it was more an explanation of this is our timeline.

And at some point, it'll be clear whether you want peace or you don't want peace. And that time is coming. It's pretty short.

(END VIDEO CLIP)

MARQUARDT: In terms of the actual timeline, John, Rubio said that it was weeks, not months. I asked whether there are any further talks planned, any further negotiations, and Rubio said no, not for the time being -- John.

JOHN BERMAN, CNN ANCHOR: All right, Alex Marquardt in Brussels.

Again, our eyes on the stock futures, a lot going on at this very moment. A brand new hour of CNN NEWS CENTRAL starts right now.

SARA SIDNER, CNN ANCHOR: Breaking this morning, stock futures tanking after China announces its own set of retaliatory tariffs on goods from the United States. This just happening in the last hour. Beijing also barring more American companies from operating there.

All of this as investors wait to see the March jobs report, which is also coming out this hour.

The White House said the case was closed, but not so fast. The Pentagon's acting inspector general now launching an investigation into top Trump administration officials using that Signal group chat to talk about military strikes.

And one man, three transplants, and one incredible donor. A New York man getting a second chance at life after receiving a new heart, liver, and kidney.

I'm Sara Sidner with Kate Bolduan and John Berman. This is CNN NEWS CENTRAL.

ANNOUNCER: This is CNN Breaking News.

KATE BOLDUAN, CNN ANCHOR: All right, less than 30 minutes from now, we're going to get a critical snapshot of the economy. The new monthly jobs report for March will be coming out, which may account for the massive DOGE cuts to the federal workforce. And depending on what it says, it could have an impact on U.S. markets when they open next hour.

But brace for impact there. I mean, stock futures have been taking a dive again this morning on the breaking news of China retaliating in President Trump's self-induced trade war. China will now impose a 34 percent reciprocal tariff on all imports of U.S. goods. That is after President Trump slapped his sweeping tariffs on China and more than 180 other U.S. trading partners.

Live look, stock futures right there behind us. You see where they stand at the moment. All the major indices trending down after what ended up being the worst day on Wall Street yesterday in five years.

After Trump rolled out those tariffs, former Treasury Secretary Larry Summers posted this.

Never before has an hour of presidential rhetoric cost so many people so much.

And as Axios is laying it out this morning, they put it this way.

President Trump is betting his presidency on the biggest instant unilateral, by choice, not necessity, economic mandate in U.S. history, gambling that generations of politicians, economists, CEOs, small business owners, academics and even some of his own staffers are wrong.

The New York Times is leading with this.

To Trump, the U.S. economy is a sick patient and tariffs are the cure.

One of the reporters on that story is joining us right now, Colby Smith of The New York Times. Thank you so much for being here. Let's talk first about this breaking news. Thirty four percent now coming from China, slapping on all U.S. imports heading there. What are you hearing about this? COLBY SMITH, FEDERAL RESERVE CORRESPONDENT, NEW YORK TIMES: So this is exactly the kind of scramble that we were all waiting to see after we got the announcement on Wednesday. It was just going to be a matter of time before all of these different countries started to retaliate or tried to strike deals with the president. And that just speaks to the highly costly nature of these measures.

Other countries have to retaliate because their cost structures are going up enormously. And companies in those countries are really going to struggle here. We're hearing signs and rising odds of recession risks across the country -- across the globe, really.

And so with these kinds of measures in place, it's only understandable that countries are trying to figure out how do they retaliate.

BOLDUAN: That latest assessment from J.P. Morgan now putting the risk of global recession at 60 percent is a punch to the gut for sure.

[08:05:00]

Talk to me about then adding into the mix what's expected with the jobs report coming out in just a few minutes.

SMITH: So the jobs report is really going to be a snapshot of a period before a lot of this chaos is starting to take place here. I mean, of course, we did have tariffs, you know, coming against China, Canada, Mexico, things like that. But those aren't really having like the large effect that we expect these current measures to have.

We're also seeing some cuts to federal workers already in place. It's a question of when that's really going to start showing up in the data. But what we are expecting to see is slower but still solid jobs growth, unemployment still at 4.1 percent. But again, this says nothing about the trajectory of the economy going forward.

BOLDUAN: We have economists.

SMITH: Yes, we have economists talking about 5 percent unemployment.

BOLDUAN: That's what I was going to say. OK, let's let's flash forward -- let's jump forward another month, if you will, and what the expectations could be if whatever is about to happen to the economy.

SMITH: So I don't know if it'll come up that quickly just because businesses are on hold right now and they're trying to see exactly how these measures are going to take place. Are they going to be put in place for a while? Are there going to be some delays?

BOLDUAN: Is it all change in 12 hours?

SMITH: Exactly. And so that's going to change in a significant way how businesses are going to respond. I mean, if these tariffs are in place, you could easily see a situation where businesses realize they can't, you know, do that big investment. They can't build that factory. They can't, you know, unveil that new product line. That's not going to require more workers. And if they're in a period of retrenchment because consumers aren't spending as much, that could also lead to layoffs eventually.

BOLDUAN: Yes. Colby, it's great to see you. Thanks so much for jumping in this morning. Really appreciate it -- John.

BERMAN: All right. With us now, Meghan Hayes, the former White House director of message planning and a Democratic strategist. And Scott Jennings, CNN's senior political commentator, former special assistant to President George W. Bush.

Yesterday, we saw the worst day in the markets in five years. Today, if you look at stock futures right now, they are poised to extend those losses maybe substantially. In the middle of all of that, President Trump said this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How's it going?

TRUMP: I think it's going very well. It was an operation. I like when a patient gets operated on. The markets are going to boom. The stocking's going to boom. The country's going to boom. And the rest of the world wants to see, is there any way they can make a deal?

(END VIDEO CLIP)

BERMAN: I think it's all going very well. Scott Jennings, does that have an animal house quality? Kevin Bacon saying, all is well, remain calm.

SCOTT JENNINGS, CNN senior political commentator: Well, he firmly believes in this. And he believes that -- and I heard him say on the plane last night, you know, countries are already calling to talk about what they can do with the United States. He firmly believes in it.

And he firmly believes in making this bet. I mean, he's betting his presidency on this issue, which is probably the most closely and longest held political and economic belief that he's ever had. He's been talking about doing it for four years.

BERMAN: Do you think it's a good bet?

JENNINGS: We'll find out if it's right, it'll be the ballsy thing that ever happened. And if it's wrong, the consequences will fall on one shoulder.

BERMAN: To that end, Megan, and Axios made this same point that Scott is making here. For better or worse, as we're looking at the stock market drops from yesterday, the future is being pointed down today. Donald Trump did this. I don't think he would deny that. I think he would own it. But Donald Trump did this by choice.

MEGHAN HAYS, FORMER WHITE HOUSE DIRECTOR OF MESSAGE PLANNING: Yes, absolutely. It's kind of shocking. The economy and the stock was at a record high when he took office. So it's just confusing why he would do this. I think that the unfortunate thing here is that he's never going to pay the political price for it. It's people going into the midterms in 26 and then into presidential in 28.

You're going to start to see that these senators aren't going to have the leeway and these members of -- other members of Congress are not going to have the leverage to get some of his agenda passed. And that's really unfortunate because those tax cuts really could help the middle class and help people. And unfortunately, he's doing the exact opposite here with these tariffs, and it's going to impact the middle class more than anyone.

BERMAN: Scott.

JENNINGS: Well, I think the tariffs are just one part of his economic plan. You know, obviously, this reconciliation bill making the tax cuts permanent, what they plan to do with energy and some other policies. I think he sees it as all working together.

On the tariffs, though, you know, their view is this isn't for short term gain. It's a long term restructuring of the way our economy works. And you know, I think they would say it's like planting an apple tree. You don't expect to get apples tomorrow. But in the long run, if you take care of the tree and you let it grow, the apples will come from the tree. That's what they believe.

Now, as Megan just said, the political consequences, though, that is a question. Will they permit it? Because over the short and medium term, if people don't like the instant reaction, will they go away from it? He's counseling. Stick with me. And I mean, that that's the job. The sales job he has to do with the American public is stay with me here. It will work.

BERMAN: And that's exactly the question. I think this morning, as we sit here in between the markets yesterday, the markets today and trying to figure out what other countries are going to do. How much runway are even the president's allies willing to give him?

I want you to listen to Senator Ted Cruz yesterday speaking about tariffs.

[08:10:00]

Remember, Ted Cruz sort of moved beyond Donald Trump saying things about his wife. But tariffs may be a bridge too far. Listen.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R-TX): If the result is our trading partners jack up their tariffs and we have high tariffs everywhere, I think that is a bad outcome for America. Tariffs are a tax on consumers. And I'm not a fan of jacking up taxes on American consumers.

(END VIDEO CLIP)

BERMAN: Now, before that, he did say he was willing to wait and see how it worked out and he would give it some time. But clearly, Meghan, not too much time. I mean, you both work in politics, Meghan, what is the time frame the politicians have here?

HAYS: I think as soon as we start seeing these retaliatory tariffs come in, these members are going to have to start making comments a little bit more that they're not going to give him a significant amount of time. We're starting to see that with China. And I assume that other countries will come back soon, too.

So I think his runway here is very, very short. I think they spent a lot of political capital getting his cabinet in. And I just think that he's wasting political capital for this reconciliation bill that he did not need to do.

BERMAN: You hear Ted Cruz there, Scott. We've heard others. I mean, Rand Paul, again, there are people who are allies with the president in varying degrees.

But it's unusual for Ted Cruz to take a stand like that.

JENNINGS: Well, what you're seeing Donald Trump try to do is basically put new DNA into the Republican Party. The tariffs, this kind of view on trade, this has not been the traditional DNA of the Republican Party. Ted Cruz and all these other Republicans that are expressing discomfort.

I mean, they came out of the Reagan era. And I mean, Republicans just have for a long time not believed this. Now, Trump is responding to a different constituency, which is new to the Republican Party.

And it is kind of fascinating to see how they sort it out. Now, what can they do about it? I mean, I know there are some people on The Hill that are not happy about it.

Maybe Congress at some point decides to get involved with legislation where they would have a say in tariffs. But that's not going to happen. Donald Trump's the president. He's not going to sign that into law.

So right now, I think the pushback is really sort of relegated to just public statements as opposed to any real action.

BERMAN: But that's not nothing. I mean, if more and more come out and say it publicly, that will create an issue for the White House. But to Scott's point, Meghan, the different constituencies, you know, we've been hearing from the United Auto Workers President Shawn Fain, they're supportive of this.

So Democrats, how do you talk to some of the people in your traditional base who might be at least open, tariff curious?

HAYS: So I actually don't think that Democrats are going to need to do a lot here. I think people are going to see pretty immediately their costs increase as soon as these start to go into effect and they will not be able to afford their just living their everyday lives. So I actually think that Democrats can really message this very easily.

You were able to afford more things. And I understand the inflation argument. And I understand all the different arguments under the Biden administration.

But the question always is, were you were you able to live better four years ago? And I think that that's something Republicans are going to have to answer coming into the midterms and the presidential. So Democrats are going to have a pretty easy thing because this is going to increase costs significantly for the middle class.

BERMAN: Yes, and again, I was looking downward there at the stock futures. As long as the markets continue in this level of turmoil, it does create a situation, the type of -- it's got our apologies to you for having this, Scott.

JENNINGS: You helpfully put it right here. I don't know. Why didn't you put it by Meghan?

Can we just shove it to the other side of the screen? I don't understand. I feel like you did this on purpose.

BERMAN: Shoving it to the other side of the screen is the issue --

JENNINGS: I think I know you did it again.

BERMAN: It's following you.

JENNINGS: Literally. Let me just get down here. Please.

HAYS: Clearly.

BERMAN: And as if to make the point. Scott Jennings, Meghan Hayes, appreciate you both being in this one.

SIDNER: Don't try to hide, Scott. We're going to come for you.

All right, this morning, the Pentagon inspector general launching an investigation to review Pete Hegseth's use of Signal to discuss airstrikes in Yemen.

And Secretary of State Marco Rubio acknowledges that, quote, markets are crashing over President Trump's sweeping new tariffs. Hear what else he had to say as he met with NATO allies about the war in Ukraine.

Plus, tragedy at a track meet, a teen stabbed and killed during a dispute. We are now hearing from the victim's mother this morning.

[08:15:00]

(COMMERCIAL BREAK)

SIDNER: This morning, the acting Pentagon Inspector General has launched a review of Pete Hegseth's now infamous use of Signal in a group chat. It was used to discuss military strikes, war plans, if you will, in Yemen with other high-ranking officials. The review will determine whether Hegseth broke government protocol by discussing official business on that app. CNN's Natasha Bertrand is joining me now from Washington, DC. What does a review look like? When someone goes in to look at something like this, how big of a breadth is it?

NATASHA BERTRAND, CNN NATIONAL SECURITY AND POLITICS CORRESPONDENT: Well, the acting Inspector General of the Defense Department, he did indicate that he would be requiring the Secretary of Defense as well as, of course, his aides and other DOD personnel to turn over certain materials as part of this investigation. And he also said that this probe will be carried out at the Pentagon in Washington, DC, and also U.S. Central Command headquarters in Tampa, Florida. Because this was ultimately a Central Command operation that was being conducted at the time that Secretary Hegseth disclosed this information on the Signal group chat.

So this could be a fairly wide-reaching probe that could reach a lot of different aspects of the Defense Department.

[08:20:00]

And we're told that it is because of the recommendation that the ranking member and the chairman of the Senate Armed Services Committee made to the acting Inspector General that this probe was ultimately launched.

Now, if you'll recall, all of this started because of that reporting in The Atlantic that disclosed that Secretary Hegseth was in a Signal group chat with several other senior national security officials discussing plans to attack the Houthis in Yemen.

And Secretary Hegseth wrote in that chat that the exact timings of when these strikes would take place, as well as the type of aircraft and weapon systems that would be involved, raising a lot of questions about whether he violated any rules governing classification or records retention laws, something that the acting Inspector General said is going to be a part of this investigation.

Secretary Hegseth said previously, as well as the secretary spokesperson, that nothing in this chat was actually classified at the time that Hegseth posted or disclosed it to the other officials.

But we were told previously that it was in fact classified. And of course, questions about whether records retention laws were violated are going to be pertinent as well, because there were disappearing messages turned on in that Signal chat indicating that they were going to be erased essentially within about two to four weeks of them being sent.

And so all of this is going to be probed by the acting Inspector General. We should also note that the former Inspector General of the Defense Department is no longer there because he was fired by President Trump early on in the administration.

SIDNER: Yes, and the big question was if discussing these plans to strike while they're happening, before they're happening and after they're happening, if that is not classified, then what is? Natasha Bertrand, thank you so much. We will be waiting for the results of that investigation -- Kate.

BOLDUAN: Still ahead for us, with Donald Trump's car tariffs now in effect, car dealers are bracing for impact and some consumers are racing to buy before prices soar.

And the list of demands the Trump administration has now sent to Harvard University. What they're asking and what it means for nearly $9 billion in federal funding that's now in limbo.

[08:25:00]

(COMMERCIAL BREAK)

BERMAN: All right, the breaking news this morning, what you're looking at, a live look at U.S. stock futures, which are down fairly sharply today. This is on the news that China is going to impose 34 percent tariffs on U.S. goods. Retaliation right there. That is a trade war.

This would be a very bad day on the markets, following the worst day yesterday in five years, which follows, honestly, several weeks of really bad market days.

With us now is CNN chief data analyst Harry Enten. So this plunge that we've seen in the market since Donald Trump took office, in terms of presidential plunges, where does this rank?

HARRY ENTEN, CNN REPORTER: Where does this rank? I mean, Donald Trump is like Thornton Mellon. I mean, S&P 500 drops a 5 percent or more at this point in a presidency. There are only two of them, right? There's Donald Trump, a 10 percent drop since he took office. The only one that matches it or exceeds it was George W. Bush back in 2001, a drop of 18 percent. This is it. This is the whole kit and caboodle since the S&P 500 was created as an index back in 1957.

When you're one of two and we're talking about drops in the stock market, uh-oh.

BERMAN: All right. Well, what makes this presidential plunge different than all other presidential plunges, except for the fact that we reclined at this point?

ENTEN: Exactly right. We're right on the eve of Passover, so why not go with that? Again, we're going to look at these drops of 5 percent plus.

What is so different about this versus the Bush plunge? Remember, it was the dot-com bubble, right? That was happening before George W. Bush took office. What did Donald Trump inherit? He inherited a bull market from Joe Biden.

Donald Trump is the only one to take a bull market and turn it into a bear market to such a degree that we're having a drop of 5 percent or more at this point. This is historically unprecedented what Donald Trump, one man it seems to me, has done to perhaps my favorite stock market index. BERMAN: My economic mentor, my mentor in all things, Christine Romans, used to say, yes, but you know, Wall Street is not necessarily Main Street. How has that sort of changed?

ENTEN: I mean, that has changed tremendously over the past few decades. I mean, what are we talking about? Americans who own stock -- you know, you go back to 1974, it was just 23 percent, either directly or indirectly. You look at where it is now. Now the clear majority of Americans own stock in one way or another, right? There are 401ks, there are Roth IRAs, et cetera.

And so what we're talking about now is something that is hitting the clear majority of Americans. What happens on Wall Street doesn't stay on Wall Street. It does in fact go and affect Main Street. And what's affecting Main Street right now is a record plunge for a president, given that he inherited a bull market and he turned it into a bear.

BERMAN: So what we are seeing one way or the other right now is a little bit of history. Harry Enten, great to have you explain it all.

ENTEN: Thank you, my friend.

BERMAN: Thank you.

SIDNER: Speaking of Main Street, the Trump tariffs are expected to push car prices significantly higher, and that has some people looking to buy right now instead of waiting. CNN's Omar Jimenez has caught up with some of them in Michigan.

(BEGIN VIDEOTAPE)

GEORGE GLASSMAN, PRESIDENT, GLASSMAN AUTOMOTIVE GROUP: I've had my share of turmoil over the years, and so that's why I'm comfortable that this, too, will be something that we'll be able to deal with and overcome.

OMAR JIMENEZ, CNN CORRESPONDENT (voice-over): But George Glassman knows it won't be easy. He runs Glassman Automotive Group in Southfield, Michigan, outside Detroit, the self-described auto capital of the world.

GLASSMAN: So my father started the business in 1969. We haven't seen anything, in my opinion, this disruptive as long as I've been.