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Hearing For Maryland Man Mistakenly Deported to El Salvador; Recession Fears Grow; China Trade War. Aired 1-1:30p ET

Aired April 04, 2025 - 13:00   ET

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

[13:00:12]

BORIS SANCHEZ, CNN HOST: It's game on for China in a trade war with the United States, hitting back on President Trump's tariffs big time, sending markets, as you can see, dipping yet again.

Plus, this hour, the Trump administration back in court for a hearing in the case of the Maryland father deported to El Salvador because of an administrative error.

BRIANNA KEILAR, CNN HOST: And refusing to fight, a fencer disqualified after kneeling in protest because she says her opponent is transgender.

We're following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

SANCHEZ: As world markets sell off, President Trump is teeing off and fears of a recession are growing more intense by the hour, J.P. Morgan now putting the odds at 60 percent.

Fed Chair Jerome Powell warning that high inflation could be the new normal.

(BEGIN VIDEO CLIP)

JEROME POWELL, FEDERAL RESERVE CHAIRMAN: Higher tariffs will be working their way through our economy and are likely to raise inflation.

(END VIDEO CLIP)

KEILAR: And we're in the final hours of a trading week that saw President Trump flipping the global economy on its head with his sweeping new tariffs.

Just hours ago, China hit back with a 34 percent tariff on American imports.

CNN's Jeff Zeleny is in West Palm Beach, where the president is today.

First, though, let's get right to Vanessa Yurkevich, who is at the New York Stock Exchange.

Vanessa, what's the reaction there like right now? VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, I

spoke to a trader a little earlier and asked him directly, how is the day going? And he just grunted, really no response beyond that, but that just shows what frustration traders are feeling down here and also just this air of uncertainty about what this trade war is going to escalate into at the end of the day.

We know that the trade war is in full effect, and many investors here are just pricing in the worst-case scenario right now. One thing I do want to point out is that we have heard a bit of news on the economic front. We got the jobs report that came in better than expected, about 228,000 jobs added. We heard from Jerome Powell earlier today, who said that the economy is in a good place, but we should expect higher inflation.

And we also heard reports from Reuters that Vietnam was willing to come to the table to negotiate. But that's not being reflected in the markets right now, investors saying that that's not enough to move the needle. They want to hear about real, tangible negotiations and both the U.S. and other countries looking to drop their trade barriers.

One thing that investors were looking at in particular is, what was China going to do today? And we heard from China. They have reciprocated with a 34 percent tariff on U.S. goods. And we have a big, big trade with China, $600 billion worth of trade every single year.

So, that is going to impact about $143 billion of U.S. goods going to China, things like chemicals, technology, agriculture in particular. If you remember, in 2018, a tariff was slapped on U.S. agriculture going into China, and China reciprocated in March with another tariff of 15 to 10 percent, and now this tariff.

That's going to impact farmers as well. But the real crux for everyday Americans is the tariff that President Trump lobbed on China of 34 percent. That is going to impact all U.S. -- all exports coming from China into the United States, about $438 billion worth of goods.

That is something that Americans are going to have to try to digest as these products come into this country. Some companies, guys, have been able to stockpile ahead of this trade war, but a lot of companies simply could not do that, and those prices will quickly move from the supplier in China to the U.S. business and ultimately to the U.S. consumer -- Brianna, Boris.

SANCHEZ: Jeff, over to you.

The president today is in Florida. He's hosting an event at one of his golf courses. He wasn't just active on the golf course. He was also active on social media as well. What's he saying?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: He has been, Boris.

I mean, it was about 15 minutes after the markets opened today here in the U.S. when the president arrived at his golf course here in West Palm Beach Florida, the Trump International. And it was quite a split screen moment to see the markets falling for a second straight day as the president was arriving on his golf course.

Now, he normally travels to Florida most weekends since he's been in office, but he's taking a longer weekend this weekend. He arrived here yesterday actually to Miami for a separate event, a LIV Golf event. Of course, that's the sort of competing version with the PGA. And they are backed by the Saudi sovereign wealth fund.

[13:05:05]

So the president spoke there last night. He's on his golf course here today, so certainly an interesting choice by this White House to not be out in the country trying to explain his policies, but in fact in one of the richest places in America.

But even as the president was on the golf course, he was still taking phone calls and trying to pressure the chairman of the Federal Reserve into lowering interest rates. Take a look at this message. It's fairly extraordinary. Most presidents keep a -- an arm's length with the Federal Reserve. This is only the latest sign of the president reaching out directly to try and pressure Jerome Powell.

He wrote this: "This would be a perfect time for Fed Chair Jerome Powell to cut interest rates. He's always late, but can now change his image, and quickly. Energy prices are down, interest rates are down, inflation is down, even eggs are down and jobs are up all within two months, a big win for America."

He goes on to say: "Cut interest rates, Jerome, and stop playing politics."

Of course, we saw that the chair of the Federal Reserve, Jerome Powell, he was speaking in Virginia today, did not respond directly to this, but did talk about the inflationary measures and the sustained inflation that will come because of these tariff policies that have upended the global economy.

So the president is scheduled to remain here in Florida until Sunday, going back to Washington. We are not expected to hear from him. Of course, that could always change. But there is no doubt, at the end of one of the biggest weeks certainly in the financial markets and one of the worrying weeks in the economy, the president is ending it here. He's still on this golf course in Florida -- Boris and Brianna.

SANCHEZ: Jeff Zeleny, Vanessa Yurkevich, thank you both.

Joining us now to discuss is Dan Ives. He's the global head of tech research at Wedbush Securities. And veteran business journalist James Surowiecki joins us as well.

Thank you both for being with us.

Dan, I mean, some of these comments from Fed Chair Jerome Powell, they shouldn't come as a surprise. A lot of folks have been saying that these tariffs are going to be inflationary. And now you have the Fed chair repeating that.

DAN IVES, WEDBUSH SECURITIES: Look, I mean, in our opinion, this is an economic Armageddon in terms of the tariff slate, the way it was laid out.

And the reality is that, if this stays on and goes into effect in terms of April and for another month, I mean, I think recession is almost guaranteed. So, for Powell, back is against the wall. How do you cut rates going into probably the biggest inflationary move ever made out of the White House maybe in 100 years?

But this is -- it's been a gut punch to the markets. I have seen it for a quarter-of-a-century. I call it an epic disaster.

KEILAR: And yet, James, you still have the president pressuring the Fed chair, who is being very clear about the inflationary impact of these tariffs and that they're larger than the Fed was expecting.

How do you see this ultimately ending? Is there a possibility where the president fires the Fed chair?

JAMES SUROWIECKI, AUTHOR, "THE WISDOM OF CROWDS": Well, I mean, in my opinion, it's illegal for him to fire the Fed chair. The only way he can fire the Fed chair is technically for cause.

And I don't think he would win a court case. So he could certainly try. But Powell has said in the past that the president can't fire him, which is correct.

And that would create -- I don't even want to think about the amount of turmoil that whole scenario would create. In terms of how it ends, I mean, I do think there are a couple of things. That I guess it was a TRUTH Social post was actually interesting to me, because I think it did actually suggest that Trump is a little concerned about -- even though he's certainly putting forth a very brave face about what's happening in the markets.

Given that we had this jobs report today, which was very good, 228,000 jobs created solidly across the board, it's hard for Powell to justify cutting interest rates at this point. The job market is still growing and inflation is still not that low. But the fact that Trump was pushing him on this did make me wonder if Trump's feeling it a little bit.

KEILAR: Yes. No, that's really interesting.

Dan, as you look at the reaction that we're seeing from Cambodia and Vietnam seemingly bending to Trump's pressure, what they're committing to, though, is lowering their tariffs on U.S. imports.

And we do have to be clear that these are called reciprocal tariffs that the U.S. has levied on them, but it doesn't actually have to do with their tariffs. That's not how they're calculating it, right? They're calculating it based on their exports and on the trade deficit.

So how do you see that move by them playing out?

IVES: Look, the reality is, it starts with that chart. I mean, that chart, it's really something almost viewed as laughable in the eyes of many on the street because it's not tariffs. It's essentially trade deficit converted into some percentage tariff in some odd calculation.

[13:10:07]

That's the issue, is that you're starting with a number that essentially makes no sense. And part of the investor frustration is, when you look at some of these tariffs, 50 percent-plus when you look at baseline for China and Taiwan, that would be the ultimate gut punch to the tech industry.

And I believe it could send the tech industry back a decade, U.S. tech industry. And guess who benefits? China. So, I think, when you look at some of these moves, the reason the market is now reacting the way it is that you look at the China retaliatory, the trade war has begun, and this is,I think, the most self-inflicted, one of the worst policy moves, if not the worst, that I have seen.

I mean, you would have to go back probably 100 years.

SANCHEZ: James, I wonder what you make of the reaction from China, slapping 34 percent retaliatory tariffs of their own on the United States.

SUROWIECKI: I think, to some degree, it's essentially just saying you can't push us around.

Obviously, China's exports to us matter a lot more to them than our exports to China matter to the United States economy in terms of the size of the exports. But we saw this happen in Trump's first presidency. He put the tariffs on China. China responded by putting heavy tariffs on our agricultural exports, and it made a huge difference.

It really took a big chunk out of our farmers' incomes. And, now, Trump made up for that by basically reappropriating money from somewhere else in the government and essentially gave American farmers about $28 billion. I would not be surprised if he tries to do something like that again.

But I think China has -- is making it clear that they're basically willing to go to the mat. And I think Dan's point about the fakeness of these tariff rates is correct. I mean, one of the problems you have with, like, Vietnam and Cambodia is that just cutting their tariffs is not going to solve the problem, because the only way to get their -- that -- quote, unquote -- "tariff rate" down is to really shrink their trade deficit with the United States.

And they're not going to be able to do that just by lowering trade barriers. So they're in a very, very tough position. And so are we because we're stuck in this trade war -- that we know Trump thinks the trade wars are good and easy to win, as he said in his first presidency. KEILAR: Yes, certainly, the language from Cambodia indicates that

they know that, but they're at least hoping for a temporary reprieve with this opening, I guess, olive branch.

And, James, we should mention you were one of the ones who figured out this math equation, I guess we could say, for what these "reciprocal" -- air quote -- tariffs are. So kudos to you, as we put up that interesting math equation there.

But as you look at what the goal is from this, which, of course, is bringing manufacturing back to the U.S., what do you think that's going to look like long term if it can be achieved?

SUROWIECKI: I will actually push back a little bit on that.

I actually think the goal for Trump ultimately is to -- he ideally, I think, would like to get rid of every single trade deficit we have with every country in the world. I mean, that's, I think, why they used that formula to come up with these imaginary tariff rates, because the assumption of that formula was that, if we have a trade deficit with a country, it's because they're doing something shady or manipulative or whatever.

So that, I think -- his goal is to try to do that. And then the reason is he wants to ultimately, I guess, bring manufacturing back. I think one -- there are two things that are really important right now. One is -- Dan's alluded to the uncertainty, right? He's injected a massive amount of uncertainty into the U.S. economy and into the global economy.

So I think it's very hard to convince investors and CEOs to say, OK I'm going to -- I'm going to spend billions of dollars to move my plant, and God only knows what's going to happen then. And I don't know what my supply chain is going to look like and the like.

The other problem, which I think is the deeper one, is manufacturing -- factories today are highly automated. So it's not really even clear to me that, assuming we do bring manufacturing back in greater numbers, that it's going to create the kind of jobs that a lot of -- number of jobs that a lot of people are expecting.

And so, again, when I look at this, the costs of this are so high, and it's not really clear to me the benefits of it are -- I just don't think they come even close to what the costs are going to be.

KEILAR: Yes, you're not alone in that sentiment, we should say, for sure.

James and Dan, thank you so much for your insights. Very helpful.

IVES: Thank you.

SUROWIECKI: Thank you.

KEILAR: And happening now, a hearing for a Maryland man who the Trump administration concedes they mistakenly deported to a notorious prison in El Salvador.

[13:15:00]

His defense team wants the government to get him back to the U.S., as the Trump administration resists that suggestion. We will have the latest from court.

SANCHEZ: Plus, a Michigan couple back on U.S. soil after nearly a month inside a Mexican prison, the couple caught up in a payment dispute over their Cancun timeshare.

Hear what they had to say about the entire ordeal next on CNN NEWS CENTRAL.

(COMMERCIAL BREAK)

KEILAR: Happening now, a federal judge is hearing arguments in the case of a Maryland husband and father who the Trump administration admits was mistakenly deported to El Salvador.

Kilmar Abrego Garcia was sent to a notorious mega-prison, along with hundreds of alleged gang members, despite his protected legal status here in the U.S.

[13:20:09]

SANCHEZ: Abrego Garcia's attorneys are arguing for his return.

CNN's Priscilla Alvarez has details on this case.

(BEGIN VIDEOTAPE)

PRISCILLA ALVAREZ, CNN WHITE HOUSE CORRESPONDENT: Lawyers for the Salvadoran national who was mistakenly deported to El Salvador last month are requesting that the Trump administration return him to the United States.

Now, so far in court filings, the administration has said that they can't do that because he is now in the custody of another country, in this case, El Salvador. But they have also said in filings that -- quote -- "The public interest outweighs the individual interest" when referring to retrieving him from El Salvador.

But in the courtroom, lawyers will be pushing for his return, and the Trump administration will similarly be arguing some of what they have said in the filing, but also responding to the judge's questions about what exactly happened here after, of course, the administration conceded earlier in the week that it had made -- quote -- "an administrative error" by returning him.

Now, his immigration attorney has also made the point that he had protected status, something that is known as withholding of removal, meaning that he could not be deported to El Salvador even if he could be removed generally. That is likely to come up because, again, that was a status that was provided by -- or granted, rather, by an immigration judge. Now, his wife had made an emotional plea earlier in the day as she

said that this entire saga has been a nightmare.

JENNIFER STEFANIA VASQUEZ SURA, WIFE OF KILMAR ABREGO GARCIA: If I had all the money in the world, I will spend it all just to buy one thing, a phone call to hear Kilmar's voice again and have the opportunity to talk to him and the kids again.

Our entire family is broken by what? In ICE's words, an error.

ALVAREZ: Now, as you heard there, his wife has not been able to make contact with her husband, who, again, is in that notorious mega-prison in El Salvador.

His lawyers today trying to get the judge to rule that he be returned to the United States.

(END VIDEOTAPE)

KEILAR: Our thanks to Priscilla Alvarez for that report.

And with us now is Harry Litman, former U.S. attorney, former deputy assistant attorney general, and now host of "Talking Feds" podcast.

Harry, what might come out of this hearing today?

HARRY LITMAN, FORMER U.S. ATTORNEY: Well, look, as you have heard, they're going to maybe initially say, oh, we can't do anything about it. He's in El Salvador now.

But that's a little bit cute or rich, you could say. They took him down there. We're paying for the prison. And they may try to stand on that.

But the judge, Judge Xinis, I think, could easily say, I don't care about -- I'm not trying to tell you what to do with immigration. I am adjudicating Abrego Garcia's constitutional rights. I am telling you to make best efforts to get him back here. And if he's not back in front of me, say, Tuesday, I want to talk to the very person who tried this and why they were told no.

I think everyone understands we have this relationship with El Salvador, by the way, which was the very country he wasn't supposed to go to because he would face the threat of violence there. We have the kind of relationship that we can now say, bring him back, please. We made a mistake.

And the effort by the administration to just drop him in a law-free zone -- and, by the way, no one, no one has ever gotten out of this prison. It's almost not right to call it a prison. It's like a concentration camp. To say that now, when they did him by mistake, and basically say, you got to break a few eggs to make an omelet is pretty horrifying.

KEILAR: You say best efforts. I mean, best efforts are open to interpretation, right? And El Salvador has a vote in this. And how are you, as a judge, to be able to ensure that the Trump administration is really doing their best efforts?

If this is permitted to stand, if there are best efforts encouraged, they aren't enough, what does that do?

LITMAN: Yes.

Well, we're seeing this with Judge Boasberg in the other case involving the AEA. And it's probably true. It is true that Judge Xinis can't simply order El Salvador to release.

But I think best efforts would mean here, you see Judge Boasberg really questioning them, holding their feet to the fire. She could do the same here, and I think understanding that, if you make best efforts, come on. Of course, we can tell El Salvador to send him back.

[13:25:01]

So if they come in a few days later and shrug their shoulders, oops, we couldn't do it. I think what she can do then is really question people individually and hard, the same way Boasberg is doing, even if ultimately it's true she can't order them.

But the administration's standing on this, it's a little reminiscent of Guantanamo, where they tried to say, oh, we put them there, we have no possibility of any influence there. But that's just not true. Of course, we have the possibility of influence. We paid for the imprisonment. We took him down there.

Obviously, we have a diplomatic relationship that we can prevail on them to please bring back someone who doesn't even belong there, has, by the way, never committed a crime, has this 5-year-old autistic child and two stepchildren. It is the ultimate kind of Kafkaesque nightmare what he's going through.

KEILAR: Judge Boasberg is also considering whether the Trump administration defied his order to pause these deportations. He said yesterday he's looking at whether probable cause exists to hold the Trump administration in contempt or officials in the administration in contempt over this.

Here's what the attorney general had to say this morning.

(BEGIN VIDEO CLIP)

PAM BONDI (R), U.S. ATTORNEY GENERAL: I anticipate this will go to the Supreme Court, be ruled in our favor. I don't believe anyone defied a court order. I think testimony came out in court that those planes not only had taken off, but were outside of American airspace.

(END VIDEO CLIP)

KEILAR: So, Harry, is she essentially saying there that she's anticipating Boasberg will hold the administration in contempt?

LITMAN: I think she is, and Boasberg made it seem clear. By the way, her legal argument is 100 percent bogus. Even if they were outside of American airspace, they absolutely were under the power of Boasberg to order back. And I think she's wrong here, and Boasberg will not let this go.

And I think it's really good for us to have their -- call their bluff or not. Are you going to defy if -- and, by the way, she says it's very clear we complied with the order. But she -- the DOJ again and again and again has refused to give that information.

Their latest effort of state secret privilege, they withdrew yesterday, because none of this is classified information. So I think they're on pretty weak legal ground. I just want to reemphasize Boasberg's very high standing and respect all the way up to the Supreme Court. She's wrong on the law.

And I think they're going to -- they're going to lose if -- they have given him nothing to use to not put them in contempt. And, yes, I think we're going to see it.

KEILAR: All right, a lot happening. A lot to watch.

Harry, thank you so much.

LITMAN: Thank you.

KEILAR: And we are staying on top of our breaking news, stocks plunging again today after China imposes reciprocal tariffs on imports of U.S. goods. Among those expected to be hardest hit by this escalating trade war, farmers. We will talk about the fallout for that community next.

But, first, this just in the CNN, splashdown off the coast of California for a historic SpaceX flight. For the first time, humans were able to orbit directly over the North and South Poles. The trip was privately funded. It was manned by four private astronauts, marking the next step in space tourism.

We will be right back.

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