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Stocks Soar On 90-Day Rollback Of U.S.-China Tariffs; Witness In Combs Trial Describes Videotaped Attack On Cassie Ventura; Israeli- American Hostage Released By Hamas, Back In Israeli Territory. Aired 2-2:30p ET
Aired May 12, 2025 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[14:02:06]
BORIS SANCHEZ, CNN ANCHOR: Trade truce, China and the United States dropping tariffs to much lower levels after weekend talks, the news welcomed on Wall Street where investors have sent stock prices soaring, while the timing of this deal was also important to the president.
BRIANNA KEILAR, CNN ANCHOR: More delays and more frustration today at Newark Airport after a weekend that saw outages of air traffic control systems. New worries now about what it will take to make sure the airport is safe for travelers and flight crews. And the federal criminal trial is now underway for music and media mogul Sean "Diddy" Combs.
The first witness is on the stand. CNN's reporters are in the courtroom and they'll be bringing you the latest from the trial. We're following these major developing stories and many more, all coming in right here to "CNN News Central."
And we're seeing a big surge for stock markets as the U.S. and China announced they are tempering their trade war, the world's two biggest economies agreeing to scale back their tit-for-tat tariffs to much lower rates for 90 days. Officials from the White House and Beijing met face to face in Switzerland over the weekend and their plans to continue discussions as their negotiated terms take effect
SANCHEZ: Starting no later than Wednesday, the U.S. will lower its 145 percent tariffs on Chinese goods to 30 percent. In turn, China will drop its tariffs on American products from 125 percent to 10 percent. CNN's Alayna Treene and Vanessa Yurkevich are tracking all of these developments. Let's start at the White House with Alayna because the administration is touting this as a big win.
ALAYNA TREENE, CNN WHITE HOUSE REPORTER: They are and they're really trying to paint a much more optimistic picture, Boris and Brianna, of what the relationship between Washington and Beijing is going to look like going forward. And I can't overstate enough just how drastic this change, not only in tone and tenor, but of course, with the terrorists themselves is from where we were just a couple of days ago. I mean honestly four, 48 ago, but also when you look at the rhetoric from last week, I mean just days ago, the president was saying that he didn't believe that a trade war with China was bad for the United States. He said as long as the U.S. isn't losing money to China, he believes that his tariffs on them are good policy. And of course, now we're seeing them rolled back on a very significant scale.
Now, as I mentioned, his tone has also been different on this. We've heard from a number of people today, including Treasury Secretary Scott Bessent, but also President Donald Trump himself, trying to paint a more positive view of how they think things with China are going to be going forward. Take a listen to how the President put it this morning in the Roosevelt Room.
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DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: The talks in Geneva were very friendly, the relationship is very good. We're not looking to hurt China. 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 may be at the end of the week. We have some other things we're doing.
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[14:05:00]
TREENE: Now, that line right there at the end is very notable when he said that he was going to potentially speak with Chinese President Xi Jinping at the end of the week. The two leaders have not spoken, we've reported since before this trade war really kicked off. And even, some of the Washington and Beijing and leaders from both nations haven't been speaking either until this weekend in Geneva, which is why, again, this is such a dramatic change.
Now, one thing to keep of note is that this is only a 90-day rollback of these tariffs, and that's really the time that both countries really need to hammer out the specifics of a broader deal. The president earlier also said that he believes that they will get a trade deal, but if they don't, he doesn't imagine tariffs going back on China at 145 percent, but likely they would go higher from where they are now from that 30 percent.
All of this, of course, comes as we're learning that the White House is really looking for an off-ramp to this escalating trade war with China, and they wanted to get some sort of win on the board before he traveled to the Middle East. Obviously, seeing that all play out today, Boris and Brianna.
KEILAR: And Vanessa, we're watching investors on Wall Street really respond to this in real time. How relieved are they, even if it's for 90 days only?
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: A huge relief. You see Wall Street cheering this de-escalation, this agreement, this deal, whatever you want to call it. For the past six weeks, I've been speaking to investors and to traders and analysts who have all said that this was the conversation, this was the deal or agreement that they have been looking to. And just look at how Wall Street is responding.
You see the Dow up more than 1,100 points, up over 1,000 points for most of the day. The Nasdaq, S&P, all seeing significant gains. One analyst told me that this is the "best-case scenario." So you have Wall Street very excited, encouraged by this news and also listening to the president earlier saying that he doesn't believe that the tariffs after 90 days will be ratcheted back up to that really unsustainable level of 145 percent. Then, and of course, China's tariff on U.S. exports of 125 percent.
But if you think about Main Street also, these are small businesses, medium and even large-size businesses that simply could not handle these tariffs. There was virtually very little trade going back and forth between the two countries. You have the National Retail Federation, the U.S. Chamber of Commerce applauding the president, but saying still these tariffs, even at 30 percent, for Chinese exports is still too high for some businesses.
Also, we heard from the footwear distributors and retailers of America, this is a group that represents Nike, Crocs, Adidas, and also small businesses. Here's what they said. They said this is a good step towards easing tensions, which is important for American businesses and consumers, but we're not across the finish line yet, some shoes still face duties approaching 100 percent and that's unacceptable. And that is because a lot of the shoes, 99 percent of the shoes that we get here in America, they're all imported a big, big share from China. And there's sort of a stacking of tariffs going on with footwear in particular.
Also worth mentioning, Boris and Brianna, that we were reporting the past two weeks of a slowdown of cargo coming into U.S. ports. That's about to change. We're about to see a surge of cargo coming in. A lot of retailers trying to capitalize who can afford it on that lower tariff of 30 percent, and they want to try to get that inventory in before the 90 days are up because, of course, we know that things can change drastically and very quickly in just 90 days, guys.
SANCHEZ: Vanessa Yurkevich, Alayna Treene, thank you both. So right now, the prosecution and their first witness in Sean "Diddy" Combs sex trafficking trial is underway. On the stand is Los Angeles Police Officer Israel Flores. He was working security at the Intercontinental Hotel back in 2016 when Combs was seen on video assaulting his then girlfriend, Cassie Ventura, in a hallway in the hotel.
KEILAR: Flores testified he received a call that day saying there was "a woman in distress" on the sixth floor. He says he stepped out of the elevator and that's when he saw Sean Combs and the woman in the elevator lobby. Flores testified he recognized the man in the lobby as Combs, so he's identified Sean "Diddy" Combs here, and that he found Combs to have a devilish stare. That is the quote that he used to describe that. He then identified combs in the courtroom.
Areva Martin is with us now. She's an attorney and legal affairs commentator. We are also joined by Lisa Bonner and I do want to note, Areva, some other things have happened, which is important here. Flores, now Officer Flores, at the time he was sort of second in command of security at the hotel. But he says that Combs actually approached him in the hotel room with a wad of cash that he interpreted to be a bribe. Flores took it to mean "don't tell nobody," he said on the stand. It really -- what do these details tell you as you're learning them?
AREVA MARTIN, ATTORNEY & LEGAL AFFAIRS COMMENTATOR: Well, Brianna, very troubling testimony for the defense. This witness is an excellent witness for the prosecution, laying the foundation for that explosive videotape that the judge has ruled will be admitted into evidence during this trial.
[14:10:00]
We've heard a lot about that videotape, the defense saying that what we've seen so far is not the complete video, and that the video in an, what they call, undoctored form is going to tell a different story. One thing to note, Brianna, the defense, part of their strategy is to paint this as the domestic violence situation that yes, Sean "Diddy" Combs was violent. Yes, he used violence on this video, but that this was all a part of a domestic violence incident involving him and a long-term girlfriend.
They're trying to downplay any suggestion that this is sex trafficking, coercion or violence used to commit sex acts as have been charged in the indictment. But, I'm not certain that defense is going to work because when you look at the totality of the evidence that the prosecution has mounted, it is very disturbing.
SANCHEZ: Lisa, I want to ask you about some of the other things that have come from Flores' testimony. Notably, he said that as he was escorting Combs and Cassie back to their room, he heard Combs tell her, "You're not going to leave" and that plays into the idea that she was there essentially against her will. But he also, Flores, apparently has told the jury that he asked Cassie multiple times repeatedly if she wanted him to call police. And he said that she said that she simply wanted to leave the premises.
Apparently when he did, he says that she left with a black eye, so marks on her face, but refusing to call the police. I wonder what you make of that.
LISA BONNER, ATTORNEY: Well, good afternoon, Boris and Brianna. That is a very disturbing statement and also, very common amongst victims of domestic violence. They are often terrified of their abusers and the repercussions that could come after reporting something as serious as her being dragged by her hair. The more violence that you are -- that you are witnessing, the more repercussions in the violence -- the repercussions might be.
So this is a very disturbing statement, but it also tracks very much with what we have heard from several of the victims and several of the witnesses throughout, that he is a very powerful man, that he is one who believed in retribution. And for her to be involved in a decades- long relationship with her, that proves that she understood and knew that if she did report that, there will be serious repercussions to come not only from Combs, but also from others in his inner circle.
And that is the -- goes to the heart of the RICO case which we are going to see unfold very, truthfully, I'm assuming, from Cassie and the federal government's case.
KEILAR: And Lisa, we're just getting all these details from now Officer Israel Flores about what happened after Cassie Ventura left. He said, after that, he went back to Combs' room with another guard, so another security guard to reiterate the hotel policy. He said Combs stepped into the hall, that he closed the hotel room door behind him. And at one point, Combs grabbed the other security guard's phone and accused him of recording the conversation, that Flores pinned Combs to the wall and told him to let go of the phone.
As the prosecution and Prosecutor Christy Slavik is building this story, Lisa, what is this saying to the jury?
BONNER: This is again saying that he is a very powerful man with a very bad temper, one who used violence to coerce people into bending to his will. And this tracks with the entire prosecution's narrative that he was violent towards his victims, that he used abuse, he used false imprisonment.
And they have not only the fact of these testimonies, but you're going to see this repeatedly throughout, not only through testimony, but through tapes, through other witness, eyewitness testimony. So I believe that they are trying to establish a pattern of not only abuse, but violence in order to get people to bend to his will.
SANCHEZ: We got an update a moment ago that Flores apparently sent an incident report at 3:00 p.m. that day, describing the entire interaction with Combs and Cassie from start to finish. I imagine, Areva, that the prosecution is going to use that to try to corroborate some of the statements that he's making. I do wonder how you think the defense is going to approach some of this testimony.
MARTIN: I think they're going to hone in on Cassie's statements that she did not want to call the police, because a big part of the defense's strategy here is to prove that this was a consensual relationship and that what was on that videotape was merely a dispute, even though it was a violent dispute between two consenting adults over infidelity.
[14:15:00]
We're going to hear a lot about what was on a telephone that Sean "Diddy" Combs has, and that, had at the time, and that Cassie Ventura was trying to take the telephone and that there was a battle of sorts or a fight of sorts over this phone. They've also made a big deal about talking about how strong these women were, how confident the women were. And all of that is a part of the defense's strategy to say, look, these women had the ability to walk away from this relationship if they felt coerced, if they felt any threat of violence. So, the jurors are going to have to really pay attention to what we now know is that so many victims of this kind of conduct don't go to the police, are afraid, as Lisa said, to make reports to the police because fear of retribution and fear of more violence. But I think the defense is really going to try to hone in on Cassie's unwillingness to step forward and make a police report or call the police at the time that she was being assaulted by Combs.
KEILAR: Yeah, it will -- that would not be unusual behavior as well for someone who is abused. So we'll see how the prosecution is then going to tackle that and ultimately, what the jury is going to believe here.
Areva Martin, Lisa Bonner, thank you so much to both of you. And still to come, President Trump is saying Qatar is giving the U.S. an Air Force One replacement free of charge, but there are a lot of questions surrounding this gift. Plus, another communication outage causes delays and cancellations at Newark's Airport. We have new information on the search for solutions.
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[14:21:20]
SANCHEZ: Breaking news, celebrations and cheers erupting in Israel and the United States this hour as the last-known living American hostage in Gaza is finally freed. These are the family members of 21-year-old New Jersey native Edan Alexander cheering the announcement of his release, and this is the first image we're seeing of the Israeli American as he was handed over to Red Cross officials in Gaza just a short time ago.
He arrived in Israel just in the past hour where he's currently being evaluated at a hospital and finally reuniting with his family.
KEILAR: Edan Alexander had been held captive for more than 580 days after he was kidnapped on October 7, 2023 by Hamas while serving in the Israeli military. We have team coverage of these major developments. We do want to begin with CNN's Jeremy Diamond, who is in Hostage Square there in Tel Aviv. Jeremy, what are you learning about Edan Alexander's release?
JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, Edan Alexander has now been reunited with his family at the Re'im Military Base just outside of the Gaza Strip, following more than 19 months of captivity. Alexander spoke on the phone with his mother while he was in those Red Cross vehicles on the way to that base, before they were actually able to embrace. We've actually just seen some of the footage of that moment.
It was actually Steve Witkoff, President Trump's Special Envoy, who gets the call with Edan on the other line. And he then passes the phone to Edan Alexander's mother, who obviously erupts in joy and asks her son how she is doing. And she tells him, you are out, this is over. It is finally over. Obviously, very emotional scenes are playing out as we speak right now, as he, Edan Alexander, this Israeli soldier, who is also an American citizen, is enjoying his first moments of freedom alongside his family.
Earlier, we saw a photo that was released showing Edan Alexander standing on his own two feet alongside a Red Cross official and several masked Hamas gunman at the moment of his release. And just the fact that he was able to stand on his own two feet, that he didn't have any kind of visible injuries to his face or his upper body was a good signal for his family.
Now, of course, the question is what this means for the remaining 58 hostages still in Gaza and indeed, President Trump and U.S. officials have made clear that they expect that this goodwill gesture from Hamas to release Edan Alexander right now without getting anything in return will hopefully lead to negotiations, successful negotiations, they hope, to release the remaining hostages and ultimately, as President Trump said, end this brutal war in Gaza.
SANCHEZ: Jeremy Diamond, live for us in Tel Aviv. Thank you so much. Let's bring in Alex Marquardt, CNN's Chief National Security Correspondent. Alex, what does this release tell you about where Netanyahu stands in all of this and his calculus because this was negotiated unilaterally between the U.S. and Hamas?
ALEX MARQUARDT, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: What is so glaring in this release is how different it is from everything else that we have seen. This wasn't any kind of exchange. No Palestinian prisoners are being released. There's no concrete promise of more aid that's going to get into Gaza. This was a deal that was negotiated between the U.S. and Hamas through the mediators, Qatar and Egypt, without Israel essentially in the picture.
So clearly, this is Hamas trying to curry favor with the Trump administration and in turn, put more pressure on Prime Minister Netanyahu. There are the families of the 58 remaining hostages, both dead and alive, who are now asking a very tough question of the Netanyahu government.
[14:25:00]
If you can get Alexander out, as much as we celebrate that, why can't you get our loved ones out as well? So Netanyahu is in a difficult position. Jeremy and I were both told that there are plans in the works for not just the Alexander family, but other hostage families as well, to go to Doha where Trump is expected to be later this week, to meet with him. That would not just be a big thank you to the Trump administration for everything they've been doing, but also designed to put more pressure on Prime Minister Netanyahu.
There is a major gulf between Hamas and Netanyahu. Netanyahu has said the goal is to end the war, put the military pressure on Hamas, and we'll get the hostages home. And Hamas has said, we will give the hostages back to you if you just end the war. But those there are on two very different pages. The Trump administration now, it seems, trying to close that gap. We now know Netanyahu is going to be sending a new negotiating team to Qatar.
KEILAR: All right, Alex, thank you so much and, amazing to see him out and to be joined. The great news received from Edan Alexander's family. Thank you.
Coming up the latest from the New York courtroom where the trial of Sean "Diddy" Combs is underway. There's testimony from a police officer who was a key security guard at the hotel where that infamous video was taken, and that could be a critical part of the prosecution's case against Combs. We'll have the latest from the courtroom next.
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