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U.S. and China Trade Truce; Plane Gift Being Worked Out; Another Equipment Outage at Newark. Aired 9-9:30a ET

Aired May 12, 2025 - 09:00   ET

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

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[09:00:06]

JOHN BERMAN, CNN ANCHOR: The U.S. pulls back in its trade war on China. A 90-day deal announced overnight. Market futures, way up. We're standing by to hear from the president to see if there are any concrete concessions here.

This morning, the president heads to the Middle East, just as the administration says it is working out a gift of a $400 million aircraft that could end up as Air Force One and then possibly be used by the president after he leaves office. Moments ago, a Democratic congressman cried corruption.

And then opening statements expected to begin shortly in the sex trafficking trial of Sean Combs. Who will testify in the first day? And we've got new information about his defense.

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

ANNOUNCER: This is CNN breaking news.

SARA SIDNER, CNN ANCHOR: A live look at the White House, where any moment now we're expecting to hear from President Trump after Trump administration pulled way back to make a new deal in its trade war with China. Under the surprise agreement, for 90 days, the U.S. will cut its tariffs on Chinese goods from the 145 percent that Donald Trump set to 30 percent. And in turn, China will cut its levies on U.S. imports from 125 percent to 10 percent. During that 90 day period, the countries say they will keep negotiating.

Global markets surging on that news. A live look at U.S. stock futures right there. Everything's up. All the major indexes.

And we are waiting for that opening bell on Wall Street that is happening in less than 30 minutes. Now, Trump will likely face questions about all this moments from now when he's expected to sign an executive order on prescription drug prices.

CNN's Alayna Treene joining us now from the White House.

You have more details about how this breakthrough went down with China.

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Yes, look, Sara, I mean, this is a major breakthrough between the United States and China on a trade war that really, just last week, showed no signs of de-escalating. Now, I'm just going to walk through some of the numbers that you did because, again, this is a huge difference from what I think a lot of people were expecting out of these talks in Geneva.

Now, this is going to be a 90-day interim scale back of these tariffs. It's going to start on May 14th, just two days from now. And essentially what the Treasury secretary laid out this morning is that the United States is going to temporarily lower its tariffs from 145 percent to 30 percent. And China will cut its tariffs on U.S. goods from 125 percent to 10 percent.

But, Sara, I cannot overstate enough again how much of a significant change this really is. And far more drastic than many people were anticipating, particularly when you consider, one, really China has been the example out of all of the presidents tariff policies. They have really been the one that this administration has wanted to hold accountable, the ones that they thought were taking the most advantage of when it comes to the United States. And so to see this change is pretty remarkable, again given as well that this is really the second trade agreement we're hearing from, apart from the U.S./U.K., when we know other deals are being negotiated. But the fact that a deal or an interim agreement, I should say, with China came together so quickly is pretty remarkable.

The other thing I would remind you as well is that this is the first time that the U.S., Washington and Beijing actually got together to talk about this, not only via the phone, but, of course, they were face -- to face in Switzerland this weekend. But this was the first significant talks that they had. So, again, the fact that we have this type of agreement is really a big deal.

Now we're hearing from a lot of the president's top economic advisers this morning, trying to spin this as a win. Already we're hearing them take a far more optimistic and friendlier tone when it comes to China. We heard from Bessent saying he thinks that neither nation wants to be decoupled. He also outlined some next steps. I want you to take a listen to what he told CNBC.

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SCOTT BESSENT, TREASURY SECRETARY: What we do want is a decoupling for strategic necessities, which we were unable to obtain during Covid, and we realized that efficient supply chains were not resilient supply chains. So, we are going to create our own.

(END VIDEO CLIP)

TREENE: OK, so it looks like we got some of the end of that sound cut off. But essentially what Bessent is saying there is that they want to reduce its reliance on China for a lot of the supply chain necessities that the United States is looking for. That probably includes critical medicines, semiconductor chips and steel. Now, you mentioned this, Sara, but we are seeing the stock markets,

global markets, really buoyed by this news -- the news. The Dow was up around 100 -- or, excuse me, 1,000 points pre-trading. Obviously, we're going to see the markets open shortly.

[09:05:02]

The White House spinning this as a win. But again, just to say -- repeat what I was saying earlier, this really is a huge change in posture from the Trump administration. I would note as well that what we've been seeing from these tariffs, particularly the inflationary stock market, economic turmoil, all of that definitely playing a role in this. From my conversations with Trump administration officials, it was clear that this trade war with China was unsustainable. So now we look ahead to see how, you know, how they're going to continue to try and keep this deal in place and further make it better for the United States.

Sara.

SIDNER: All right, Alayna Treene, thank you so much for your reporting there at the White House for us.

Kate.

KATE BOLDUAN, CNN ANCHOR: So, President Trump heads out today for his first major foreign trip of his second term. One of his stops, Qatar, a country he also now apparently is getting a wildly lavish gift from. On social media, the president says that the defense department will get -- will be receiving a new jet, quote, "free of charge" from the Qatari royal family. The president saying that it is a very public and transparent transaction.

The jet, one of a line of aircraft that Trump toured back in February, actually, would be retrofitted and used as Air Force One. It is worth hundreds of millions of dollars, of course. And a source tells CNN that as part of this gift, the plane would eventually be donated to the Trump Presidential Library, so it effectively remains his when he leaves office.

CNN's Paula Hancocks is tracking this one for us, and she's joining us now.

And the White House press secretary is speaking about this today, Paula. What is she saying?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: That's right, Kate. Well, Karoline Leavitt was mentioning this and asked about this on Fox News this morning. Let's get straight to what she said, because it is a very poignant question. Here we go.

(BEGIN VIDEO CLIP)

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: The legal details of that are still being worked out. But, of course, any donation to this government is always done in full compliance with the law. And we commit ourselves to the utmost transparency. And we will continue to do that.

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HANCOCKS: Now, she has also pointed out that the Qatari government graciously offered to gift this plane to the Department of Defense. She was also asked, would Qatar expect something in return? To which she said, absolutely not.

Now, we are hearing from the other side as well. Remember, the U.S. president will be in Qatar on Wednesday, the second stop in this three stop trip to the gulf states. And we heard from a Qatari official saying that this was going to be a government to government transaction, that it was the Department of Defense in Qatar giving it to the Pentagon, who would then retrofit it with all the security assessments and necessities for something like Air Force One. And it was not a personal gift to Donald Trump himself.

Now, the U.S. president has highlighted the fact that it is free, that it is a gift. The Democrats have highlighted the fact that it likely breaks ethical and legal rules, saying that a sitting U.S. president cannot gain any benefit or have any donations of this type from a foreign government.

And it also comes at the same time as we are hearing that the Qatari government was a key mediator when it comes to the imminent release of Edan Alexander, the last -- believed to be the last living American hostage in Gaza. So, there is a lot surrounding Qatar at this point, just two days out from the U.S. president visiting Doha.

Now, we know that Qatar wants security from the United States. We know that there is a very significant large military base of the U.S. in Qatar. So, there are these close ties already.

Kate.

BOLDUAN: Yes.

Paula, good to see you. Thank you so much for the reporting.

John.

BERMAN: All right, happening now, or very shortly, day one of the federal trial of Sean Combs. Very shortly we could see opening statements. He has pleaded not guilty to charges of racketeering and sex trafficking.

I think what you're looking at right now, to explain what the picture actually is, is you're looking at the line outside the courthouse of people waiting to get into that trial. It's not just a random street shot in New York City. That's outside the federal courthouse downtown.

With us now is CNN's senior legal analyst and former state and federal prosecutor Elie Honig, and defense attorney Misty Marris.

And because I think we are going to hear opening statements, or we're expecting to sometime fairly soon, let's talk about those. First, for the prosecution and the defense.

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Yes.

BERMAN: Elie, what does the prosecution need to do in these statements?

HONIG: So, two things. First of all, the prosecution needs to convince this jury, or explain to this jury, that Sean Combs' conduct was horrible. But second, and more difficult, that his horrible conduct actually matches the federal crimes charge. Now, they've got a lot of proof. We're familiar. We know there's going to be four -- at least three, maybe four different victims and witnesses taking the stand.

[09:10:04]

We remember from the indictment there's evidence of guns and drugs and baby oil and all sorts of things like that. Fine. That's important. You need to convince the jury this is a really bad guy.

But the charge here is not domestic violence. It's not that he had a long term bad relationship with somebody. It's racketeering. And so, the prosecution has to explain to the jury that racketeering means an ongoing criminal enterprise, and that this was about more than a domestically abusive relationship.

BERMAN: So, you come out and say, what, this is a case about what?

HONIG: This is a case about a criminal operation. This is not about the relationship -- bad relationship between one person, and one man, one woman. This is about an ongoing, intentional operation.

BERMAN: All right, Missy, we do understand that the defense is excited to lay out its case. Our Elizabeth Wagmeister is saying this is going to be their first chance to say what their version of event is. What do you expect from them in the opening statement?

MISTY MARRIS, : The defense is going to have to get out of the big issue for them, which is that video of Cassie. And to Elie's point, prosecutors have this burden to show, this isn't just a domestic violence incident. That's not what he's charged with. This is sex trafficking and racketeering. That's where the defense is going to have to toe a fine line. They're going to have to concede to bad behavior. This video exists. You're going to see it. But it's part of a long term volatile relationship. And the prosecutor's star witness is somebody who was in a relationship with Diddy for ten plus years. So, they're going to start to sow those -- sow that, just basically saying, you know, look at this with a skeptical eye because this is the prosecution's star witness. And this is not -- what he's charged with is not what you're going to see on that video.

BERMAN: You're talking about Cassie Ventura, a longtime girlfriend to Sean Combs, and you're talking about a video, which was first obtained by CNN years ago, which does show a moment of abuse between Combs and Ventura. You're suggesting that the defense, even in their opening statements, gets out ahead and explains this. MARRIS: They're going to have to. They know it's coming into the courtroom. They fought to keep it out. But what they don't want is for the jury to look at every single piece of evidence in this case through the prism of that he is a violent abuser. Remember, prosecution's argument is going to be, this is an all-powerful, rich, famous man who used his power to force women and others into sexual transactions through force, fraud and coercion. They're going to say, look at the force. You can see it on the video.

HONIG: Yes, that' -- that's spot on. But that video is devastating evidence for the prosecution. Yes.

BERMAN: So, the defense fought hard to keep it out.

HONIG: Yes.

BERMAN: The prosecution got it in. How careful do they have to be with how they use it? How would you use it?

HONIG: Right. So, you can't use it in an inflammatory manner. But you can -- what -- the technical reason it's in is to show that there was force involved in this sex trafficking, which is a key element of the crimes.

But man, seeing it on tape like that, I mean we've all seen the tape.

BERMAN: Yes.

HONIG: It's so visceral. It's so stomach churning And there's a huge difference as a prosecutor, or even a witness, saying this was a violent man. This was a man who engaged in assaults. And just rolling that video. That is going to imprint itself in the jury's brains.

BERMAN: So, there was a civil case of sexual assault that Cassie Ventura brought, and it was settled.

MARRIS: Yes.

BERMAN: How does that play here? Is that something the defense can and will use?

MARRIS: The defense is absolutely going to use that in the cross- examination of Cassie. Again, this is an area where they're going to have to be gentle but also really go for the jugular. And I say that because the jury is going to see that video, they're going to see Cassie as at least being victimized in that instance. But what the defense is going to say is, not only was she in this long term relationship, she also -- she experienced abuse in this isolated way in the course of a volatile relationship. But she also brought a civil suit and she got paid a tremendous amount of money.

Keep in mind, the defense has also asked the court on cross- examination to bring in evidence that Cassie was mutually violent with Diddy. So, we know where this cross is going to go, and they're going to use that settlement, as well as other factors from their relationship, to try and undercut her testimony. BERMAN: And again, as we are getting, we think, ready for opening

statements sometime today, I was struck by reading, this is sort of a full employment act for lawyers here. I understand there are eight lawyers that are going to be on the defense bench there and six for the federal prosecutors.

HONIG: That absolutely baffles me. Having six assistant U.S. attorneys sit at the table. So, first of all, in all of my time there, I never was part of or heard of more than three AUSA's in a case. And I'm talking massive terrorism cases, organized crime cases. In fact, sometimes I did a couple where we had three. I felt a little bit like, ah, does this look like we're overkilling it? Does the jury look and go, they need three people for this?

Six prosecutors on one defendant is ridiculous and it sends a bad message to the jury. It's going to play into the defense point that Misty was making right now, that this is a pile on. Everyone's trying to get their glory, their piece of fame off of this case. And when you have six prosecutors sitting there, it feeds into that.

BERMAN: All right, Elie Honig, Misty Marris, don't go far. Obviously, we are waiting for this to get underway. Unclear exactly when it will, but rest assured, when they are in opening statements, we will report it. We'll get back to you. Thank you.

[09:15:03]

Kate.

BOLDUAN: Also ahead for us this hour, chaos at two of America's busiest airports as equipment issues continue to ground flights. What you need to know if you're traveling today. And we are keeping an eye on Wall Street, where market futures have been surging all morning, and they're looking like they're ready to surge at open.

We'll be right back.

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SIDNER: Newark International Airport experienced yet another equipment outage on Sunday that led the FAA to implement a ground stop, delaying inbound flights for about 45 minutes.

[09:20:09]

It is the third incident of equipment issues at the airport in just over a week. Transportation Secretary Sean Duffy announced that over the next couple of weeks they will be scaling back capacity at Newark while they try to fix this issue. He also reassured fliers that it is safe to fly into Newark's airport as the busy summer travel season is just around the corner.

Joining me now is CNN transportation analyst Mary Schiavo.

We talked about this last week. And here we are again. And there's been another technical failure. I mean how do you fix this right now at Newark while planes are still flying in and out?

MARY SCHIAVO, CNN TRANSPORTATION ANALYST: Well, Secretary Duffy got it right, but wasn't as blunt as perhaps I am. The only way to fix it is to put in a short term fix, which is what he said, reduce the number of flights, because he has already said, you know, we now have to admit -- the FAA now has to admit that the risk is very high when they allow this cobbled together system, moving people from New York to Philadelphia to run traffic into Newark, they said, oh, we could have outages and there's no backup if we do, but the risk is, you know, the one in a million shot. It's not going to happen. Now it's happened at least four times that we know of and probably more.

And so, Secretary Duffy has said, look, we cannot buy the equipment we need. And the second thing he's already said is, and we don't have the air traffic controllers we need. We're putting them in training. And we're at the lowest point in decades, but we're putting them in training.

So, he has no choice. He has to cut back on the number of flights. And I do think it's going to take the Department of Transportation orders, cut back on the flights.

SIDNER: Wow. I do want to ask you, are we just hearing about this more? Obviously, Newark having it happen several times in a week is -- seems like an anomaly, but we did hear from Transportation Secretary Duffy saying, this could happen anywhere because the equipment is so old.

So, are we hearing about these more or have these things been happening and we're just becoming more and more aware of them?

SCHIAVO: Well, I think we're more aware of them. I mean, certainly the things at Newark are happening -- it started happening last year. I think November 6th was when we first heard about one.

But, you know, the General Accounting Office, you know, last year put out a report and said that there are probably 40 percent of the systems that can't be fixed or are at a point where they may not be able to be fixed. So, this has been coming for a long time.

But the -- you know, it's surprising that no one focused on that report that came out last year, really setting out the vulnerabilities in the system and the fact that we cannot buy this very old equipment. You know, the terminals that they're talking about, for example, that were failing, those were put in, in the '90s. I mean I was there when they were put in. And they're failing because its ancient technology.

And so, yes, we're hearing about it more. But these reports, if, you know, if the FAA followed what was, you know, what they knew and they followed the risk and they acknowledged the risk, I mean they knew about this for some time.

SIDNER: Yes. I can't believe that the '90s was 30 years ago. You just hurt my heart there. But anyhow, I do want to ask you sort of about how they're going to go about doing this, because right now, with DOGE sort of making cuts, this sounds like an extremely expensive endeavor that needs to be undertaken because the equipment is just so old around the entire country.

SCHIAVO: Well, you've hit it right there, expense. It is very expensive. And they -- when they had the big rollout last week and they had, you know, like 50 people on the stage saying they're all buying into this. And Congress has said that they are giving them an initial budget of something like 12.5 or 15 billion, that's the tip of the iceberg. You know, in years past they -- they -- they were building out and dumped landing systems, control systems, et cetera. And in the '90s, they were 3 billion for just pieces and parts.

This system is probably going to cost five times those estimates, maybe even ten times those estimates. But it has to be rolled out over years because it's simply not available. It has to be designed and built. They can't go to the local store and buy it. And so it will take years to build the system, and it probably take one or two years to get the controllers through training, because it takes about 18 months to train a controller, and then they have to have on the job training after that.

So, this is a long-term fix, which is why, once again, he's going to have to cut traffic at airports with problems. There is no alternative.

SIDNER: Yes, that is the only way to make it a little bit safer for people because these equipment failures keep happening.

Mary Schiavo, it is always a pleasure. Thank you so much for joining us this Monday morning.

[09:25:02]

John.

BERMAN: All right, we are standing by for the opening bell just minutes away. You can see futures are cooking. Investors are thrilled after the United States pulled back from its trade war with China. China pulling back as well. This 90-day sort of pause in these huge tariffs.

And then breaking news on the fate of Edan Alexander, the last living American being held in Gaza. An Israeli official tells CNN he is expected to be released just about two hours from now.

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