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Markets Surge at Open; Trump to Speak about Trade Truce; Edan Alexander to be Released; President Trump News Conference. Aired 9:30- 10a ET
Aired May 12, 2025 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[09:30:06]
SARA SIDNER, CNN ANCHOR: In just a few seconds here, U.S. markets will open after a major breakthrough in trade talks between China and the U.S. overnight. The two countries agreeing to a 90-day rollback on tariff hikes. The move gives negotiators a critical window to work out a potential longer term deal.
There is that bell. Let us see how the markets react. And we're here with Zain Asher, who is joining me. And we're hearing that bell go. And we're going to be seeing what the markets say about this change. A huge sort of pullback by the Trump administration on those 145 percent tariffs on China.
ZAIN ASHER, CNN ANCHOR AND CORRESPONDENT: Huge.
SIDNER: Now down to 30 percent.
ASHER: Sara, this is huge. Let's see what the markets are doing. The Dow, of course, opening significantly higher. I mean futures have been pretty much up more or less all morning.
But this is really interesting because they're up not so much because of that headline number, the 30 percent tariffs that you mentioned, but how it relates to expectations. If Donald Trump had started off this trade war out of the blue, imposing 30 percent tariffs on China across the board, we would, of course, see markets plummet. It's only because that the 30 percent is much better than the 145 percent that we were expecting.
Also, I think it's really interesting, and probably quite a smart strategy, that Scott Bessent went into these negotiations in Geneva really sort of clamping down on expectations, telling everyone, listen, do not expect any kind of deal to be announced here. Nothing major is going to happen. That also tempered down expectations as well.
And then Trump coming out on social media saying, you know, we might get an 80 percent tariff on China, which would have been, by the way, a near embargo. What I think is also really interesting is that it's not just stocks
that are doing well as a result of this, but other asset classes that have really suffered because of the uncertainty also doing up. So, for example -- doing well. Also, for example, so the U.S. dollar, that's up about 1 percent or so right now. Gold is down, which tells you that people are feeling a little bit more secure about the future of the U.S. economy.
I'm not quite sure, Sara, how long this sugar high is going to last, because there's just still so many unknowns. What happens when this 90-day period is over? That's one question I have. Also, if China does its -- if China actually really works hard to clamp down on the fentanyl issue, does that mean that that 20 percent tariff on fentanyl, does that completely go away?
Also, what happens with intellectual property, for example? What happens with the ease of doing business for American companies in China? Is all of that going to be hammered out during the next 90 days?
I also think it's worth noting that politically this is just as important as it is economically. You think about the anti-China trade sentiment, how important that is to Donald Trump's brand. It's something, obviously, that he campaigned on. So, the idea that suddenly these tariffs against China are going to be reduced to zero anytime soon is clearly not going to happen. And Scott Bessent sort of intimated that much as well.
SIDNER: He did. And I do want to ask you, you know, you had said this earlier, that had he started this with 30 percent tariffs, starting this trade war, putting that on China, the markets would have dumped, right?
ASHER: Look at the nightmare.
SIDNER: So, what does this now mean that this is now a 30 percent tariff for the next at least 90 days?
ASHER: Right. So, inflation -- inflationary pressures are going to be better than what they would have been. Also the sort of ease of doing business, just in terms of the disruption to American companies, also that's going to be better. But it really depends on how American businesses end up passing on the higher cost to consumers. Will some American companies eat it up and say, listen, this is hopefully going to be only temporary. We're going to absorb these costs. Or will they end up passing it on to consumers. And if so, by how much? That is the big question here. And that will indicate, or that will affect how much this affects the U.S. economy overall.
SIDNER: That's right. And the smaller companies can't really afford 30 percent more --
ASHER: Small businesses, exactly.
SIDNER: To pay for things to bring them in.
ASHER: Right.
SIDNER: So, you will see the prices change.
ASHER: Right.
SIDNER: Thank you so much, Zain Asher,
ASHER: You're welcome, my love.
SIDNER: It is quite a pleasure. And there you go, the markets way up this morning after the news.
ASHER: Yes.
SIDNER: John.
JOHN BERMAN, CNN ANCHOR: All right, with us now, former White house spokesperson under President George W. Bush, Pete Seat, and Democratic strategist Julie Roginsky.
I want to read you what Charlie Gasparino over at Fox Business said. He said, Trump was forced to back off. End of story. Film at 11.
Pete, what happened here?
PETE SEAT, FORMER WHITE HOUSE SPOKESPERSON UNDER PRESIDENT GEORGE W. BUSH: I don't think that's right at all. What happened is the United States of America got China to the table. The second largest economy in the world came to the table to talk to the United States. I know at first blush it might seem like this is a nothing burger, which it is not, and it might seem like we just came to an agreement to negotiate further, which in some cases we did.
But the reality is, we cannot decouple from China, and they don't want to decouple from us. That is a big statement that came out from this. And both sides agree that we need to better balance our trade.
So, this is the first step.
[09:35:00]
And hopefully, as part of these negotiations, China will reduce or even eliminate some of their non-tariff trade barriers that will open their market up to more American manufactured goods. And that will be a huge win for the American economy.
BERMAN: We are standing by, you're seeing pictures right now from the White House. The president expected to sign an executive order very shortly on drug pricing. And we imagine he may speak about this deal as well.
So, Julie, Pete Seat says not a nothing burger, which would make it a burger. What do you think about this last six weeks politically? Because we're back sort of where we started here with maybe the U.S. and China talking. Was it worth it politically? JULIE ROGINSKY, DEMOCRATIC STRATEGIST: On Friday there was not one
ship headed to the port of Los Angeles from China. What does that tell you about what politically is going to happen in the next several weeks, if it's not happening already, with empty shelves and with the fact that as back to school shopping ramps up in a couple of months, supplies will be low and prices will be high. T
his was not a nothing burger. I agree it was a rancid burger that was handed to us by the Trump administration. He has completely caved. We still have 30 percent tariffs on Chinese imports coming in. China is still tariffing us. And all for the fact that we will potentially talk to each other, creating further market uncertainty.
Manufacturers can't make money that way. They can't plan for the future that way. They can't plan for Christmas that way. And what that means politically is that as the CEOs of Walmart and Target and Home Depot told the president several weeks ago in the Oval Office, shelves are going to start to be empty. And then you will see what is going to happen to the American consumer and what is going to happen politically to the president.
He's already upside down with his approval ratings. He's already lost the voters who voted for him, the low information voters that tipped this election over to him, who are not necessarily people who follow the news. He has completely flipped upside down with them. And it's going to continue to get worse because, as you pointed out, 30 percent tariffs are still astronomical. And that's going to impact the American consumer.
BERMAN: We'll see what happens over the next 90 days. Again, the markets love it, at least for now. I'm looking down at the markets after the opening bell. You see the Dow up more than 2 percent. Again, live pictures from the White House. We're standing by to hear from the president. While we wait for him, Pete, let's ask -- let me talk to you about plains, big plains, big giant 747s that the White House says are going to be a gift -- they're working out a deal to get a gift of a giant $400 million plane from Qatar that the president would then use temporarily as Air Force One, and then maybe put in his presidential library after some private use, depending on -- on how that works out.
Ari Fleischer I think preceded you in the Bush administration, said, "nothing about getting Air Force One from a foreign government feels right. It may be legal, but I wouldn't do it. Air Force One should be American through and through. It shouldn't pass through foreign hands, and it shouldn't be a gift from a king. Don't do it."
What do you think, Pete?
SEAT: Ari is a good friend, and he's a smart man. The optics of getting Air Force One from another country are bad. The ethics of potentially transferring the plane to the presidential library, where a private citizen, Donald Trump, could then use it, are bad. The esthetics, that putrid blue and burgundy that he wants to paint the plane, oh, also bad. But worse is the security concerns. And the fact that they would pretty much have to gut the plane down to its bare bones to ensure that it was not tampered with in any way. The president of the United States' safety is paramount in this situation. It should be built in America, as Ari said, by Americans with security clearance. That's the way to do this.
BERMAN: I was not expecting the color critique there.
And, Julie, while we are standing by in the White House for the president to speak, again, we expect he'll talk about tariffs, but this is an event surrounding an executive order signing a document on drug pricing where he's going to, I think, suggest essentially the U.S. won't pay on Medicare, Medicaid for drugs any more than the lowest price paid by other countries. What do you think of the president getting and making this kind of statement on drug pricing?
ROGINSKY: Joe Biden did this, if you remember. He just didn't know how to communicate it right. But, I mean, this actually passed Congress and was signed into law by the president, former president, under the former administration, which allowed them to -- to negotiate drug prices through Medicare and Medicaid.
Look, I'm all for it. I'm glad the president is doing it. I'm very happy they're no longer in thrall to big pharma. But we'll see what happens, because these executive orders tend to come and tend to go, depending on who decides to have the presidency or at the last moment. The law is in place already. And when the Republicans -- when Democrats passed that law under the last administration, Republicans opposed it tooth and nail.
[09:40:00]
So, again, I'm glad to see that they're coming around, but it's just interesting to me that they will never come around to anything that's not coming out of President Trump's mouth, even though it's exactly something that President Biden did under the law in the last administration.
BERMAN: Julie Roginsky great to see you.
Pete Seat, always nice to see you. Thanks so much for coming on. Again, standing by for the president.
Kate.
SIDNER: I'll take it from here.
BERMAN: Sara.
SIDNER: Any moment now, President Trump will speak for the first time since the deal that was made with China.
Stay with us. We'll be right back.
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[09:45:09] KATE BOLDUAN, CNN ANCHOR: All right, the breaking news, we've just learned that the last known living American hostage being held by Hamas is expected to be released just under two hours from now. Edan Alexander, an Israeli American soldier, has been held hostage since October 7, 2023.
And CNN's Jeremy Diamond has much more from Tel Aviv for us on the very latest.
And, Jeremy, what more are you learning?
JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, indeed, we are expecting that within the next two hours Edan Alexander, that Israeli soldier who is also the last known living American hostage held in Gaza, will indeed be released. He will be handed over to the Red Cross and then quickly make his way to an Israeli military base in Rahim, just outside the Gaza border. That is where his mother, Yael, alongside the U.S. hostage envoy, Adam Boehler, are now waiting for him. And as that is happening, and as we expect his release imminently, we also are seeing the pieces that are starting to move as a result of what's being described to us as a goodwill gesture on Hamas' part towards the United States in order to try and kick start additional negotiations for more hostages to be released, for a ceasefire to be established in the Gaza Strip.
And indeed, Prime Minister Benjamin Netanyahu, he just spoke with President Trump and has announced that he will be sending an Israeli negotiating delegation to Doha, Qatar, tomorrow to try and advance those negotiations following a substantial diplomatic effort here by the United States to not only secure Edan Alexander's release, but to also ensure that this is just the first step towards securing the release of all other 58 remaining hostages held inside the Gaza Strip.
There is also now a question about whether Edan Alexander, once he is released, may travel to Doha, Qatar, where President Trump is expected to be later this week. Edan Alexander's family has said that they have received an invitation by President Trump for them and for Edan to travel together to Doha once Edan is released. The family, I'm told, is inclined to accept that invitation, but it will be dependent on Alexander's medical condition and, of course, his own desire to actually do that.
There are a number of unknowns here. We don't know exactly in what condition Edan Alexander is after 19 months of captivity. And also after, we should note, that less than a month ago Hamas had said that it had lost contact with militants who were guarding Edan Alexander in Gaza due to an Israeli airstrike. So, there is the possibility that he was wounded in that strike. If indeed there is some veracity to that, we cannot independently confirm that at this stage.
But I can tell you that there is a lot of hope in Israel today that this decision to -- to free Edan Alexander, secured by the United States, could perhaps lead to the release of additional hostages, the first time that there has been hope in a few weeks now as it seemed like we were marching towards an expansion of the Israeli military's ground operation in Gaza, and very far away from another ceasefire and hostage release deal. But things are changing very quickly at the moment in this region.
Kate.
BOLDUAN: It does feel that way, Jeremy. And just a wonderful, wonderful day for the Alexander family and for so many. Thank you so much. We're going to be getting back to Jeremy. He's going to be following this very closely. But now we know we will -- we are told we will be -- he will be released this morning.
John.
BERMAN: All right, we have our eye on the federal courthouse here in Manhattan for the beginning of opening statements in the federal sex trafficking trial against Sean Combs. It's taking a little longer to get started than we thought it would. We'll try to get some answers as to why.
Also, standing by to hear from President Trump. You can see right there, cameras set up. Expected to announce an executive action or signing a document on drug pricing. But we also imagine we will hear from him on the United States backing off its trade war with China overnight.
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[09:50:51]
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: To nations with lots of nuclear weapons. And they were going at it hot and heavy. And it was seemingly not going to stop. And I'm very proud to let you know that the leadership of India and Pakistan was unwavering, powerful, but unwavering in both cases in having peace. They really were. From the standpoint of having the strength and the wisdom and fortitude to fully know and to understand the gravity of the situation. And we helped a lot.
And we helped also with trade. I said, come on, we're going to do a lot of trade with you guys. Let's stop it. Let's stop it. If you stop it, we're doing trade. If you don't stop it, we're not going to do any trade. People have never really used trade the way I used it, that I can tell you. And all of a sudden they said, I think we're going to stop. And they have. And they did it for a lot of reasons. But trade is a big one.
We're going to do a lot of trade with Pakistan. We're going to do a lot of trade with India. We're negotiating with India right now. We're going to be soon negotiating with Pakistan. And we stopped the nuclear conflict. I think it would have -- it could have been a bad nuclear war. Millions of people could have been killed. So, I'm very proud of that.
I also want to thank Vice President Vance and Secretary of State Rubio for their work and efforts. They worked very hard on that. We also, as you know, created a situation where the Houthis, for the first time ever, have ceased firing and they've let it be known that they're not going to be firing at American ships anymore, not going to be firing at Americans anymore. This was a heavy barrage that lasted for approximately 50 days. And, as you know, they've been in war essentially for forever. But over the last ten years they've been very difficult for other countries. Nobody was able to do what we did. But
they stopped and we take their word for it. They -- their surrogates and them directly said, we don't want to do this anymore. And so, we were satisfied with that.
In addition, yesterday we achieved a total reset with China after productive talks in Geneva. Both sides now agreed to reduce the tariffs imposed after April 2nd to 10 percent for 90 days as negotiators continue in the larger structural issues.
And I want to tell you that -- a couple of things. First of all, that doesn't include the tariffs that are already on. That are our tariffs. And it doesn't include tariffs on cars, steel, aluminum, things such as that. Or tariffs that may be imposed on pharmaceuticals, because we want to bring the pharmaceutical businesses back to the United States. And they're already starting to come back now based on tariffs, because they don't want to pay 25, 50 or 100 percent tariffs. So, they're moving them back to the United States.
I spoke to Tim Cook this morning, and he's going to, I think, even up his -- his numbers, $500 billion. He's going to be building a lot of plants in the United States for Apple. And we look forward to that. I really do look forward to that.
But the talks in Geneva were very friendly. The relationship is very good. We're not looking to hurt China. China is being hurt very badly. They were closing up factories. They were having a lot of unrest. And they were very happy to be able to do something with us. And the relationship is very, very good.
I'll speak to President Xi maybe at the end of the week. We have some other things we're doing.
But one of the biggest things that we're doing, and I don't know if people realize this, but we made a great deal with China. A great trade deal.
[09:55:00]
But it was a much bigger deal originally, and then they canceled it right in the last day. Some of your faces, I remember, were -- were there when that happened.
I remember you. And we had a deal where they opened up their country to trade with the United States, and they took that away at the last moment. And then I canceled the whole thing. And then six months later we ended up doing a smaller deal. But it was a big deal. It was $50 billion worth of product that they were going to purchase from our farmers, et cetera.
And we agreed to that. People thought it was 15 because they were doing 15. We made it 50, because I misunderstood the 15. I thought they said -- I said, you got to get 50 because when I asked, if you remember the story, when I asked, what are we doing with them, my secretary of agriculture at the time, Sonny Perdue, said, sir, it's about 15 billion and we're asking for 15. And I thought he said 50. So, I said, so they came back with a deal at 15. And I said, no way, I want 50, because you said 50. They said, sir, we didn't say that.
Anyway, bottom line, I said, go back and ask for 50, and they gave us 50. And they were honoring the deal. And we would call them up a lot for the corn and for the wheat and for everything. The -- they were honoring the deal.
And then, when Biden got in, they no longer honored the deal. There was nobody to call. I would call on an average of once every two weeks to say, come on, you have to speed it up a little bit. And our farmers were doing great. I said to them, buy more land and bigger tractors, if you remember. That's what happened. But the deal was a very good deal.
But the best part of the deal was that we opened up China. China agreed to open itself up to American business to go in. And it would have been a great thing, I think, for China. They would be able to see things that they haven't seen. They would be able to buy products that they have never been able to buy. Would have been great for American business. I think it would have brought unity between China -- a better unity between China and the United States. And the bottom line is that they canceled it the last day. We were all set to sign it, and then I was a little bit angry. I got a little angry. I said, they canceled the deal? The deal was done. It was all ready to be signed. And people went over, they came back to me, sir, they don't want to sign the opening up China.
Well, the biggest thing that we're discussing is the opening up China, and they've agreed to do that. But it's going to take a while to paper it. You know, that's not the easiest thing to paper. But that's the single, I think to me, some people would disagree, some people would say we're getting a lot of money with tariffs or whatever. But, you know, especially when you add what we already have because, remember, we're already getting the 50 percent on steel and different things. That's not included in these numbers. So, you can add that.
But -- but the biggest thing to me is the opening up. It would be -- I think it would be fantastic for our businesses if we could go in and compete and compete with China. It would -- it would be a lot of jobs for China. It would be, I think, at a time when they can, frankly, use the jobs. And that's what we're talking about. So, that's a very, very important element to add.
So, when Scott, I watched him speak the other day, and I think he didn't want to say it, but I said it's OK to say it. Look, if we don't get it, we don't get it. But if we don't get it, it won't be a positive thing. But if we do get it, I think it's maybe the most important thing to happen.
Because if you think about it, we opened up our country to China. They come -- we don't -- I mean they have very few restrictions. And they didn't open their country to us. Never made sense to me. It's not fair. And they've agreed to open China. Fully open China. And I think it's going to be fantastic for China. I think it's going
to be fantastic for us. And I think it's going to be great for unification and peace.
China will also suspend and remove all of its nonmonetary barriers. They've agreed to do that. Well, they're very numerous. But again, to me, the biggest thing that came out of that meeting is they've agreed -- now we have to get it papered, but they've agreed to open up China. That will be great for everybody.
And third, I'm very happy to announce that Edan Alexander, an American citizen who, until recently, most thought was no longer living, thought was dead, is going to be released in about two hours, actually. And he's going to be released before the eyes of Steve Witkoff, who has done a fantastic job. I just, you know, I know a lot of people that have a lot of talent. I know Steve. He had a lot of talent. But I know a lot of people with a lot of talent. But I had -- there's one that I thought had a special way about him, special personality. Aside from being a good dealmaker, had a special way about him. And it was Steve.
[10:00:04]
Knew very little about the subject matter. Who does. But he learned it in about two hours.