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Trump Administration Targets Chinese Student Visas; Harvard Wins Legal Victory; Housing Market Cooling?; Trade War Interrupted. Aired 1-1:30p ET

Aired May 29, 2025 - 13:00   ET

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

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BRIANNA KEILAR, CNN HOST: Trade war interrupted. A court blocks the president's ability to enact sweeping tariffs, throwing the White House's economic agenda into chaos.

BORIS SANCHEZ, CNN HOST: Plus, an Ivy League showdown, a courtroom fight playing out just six miles from Harvard's graduation ceremony today. But the university has already scored a point against the Trump administration in the battle over a ban on international students. We have the latest.

And at the criminal trial of Sean "Diddy" Combs, a former assistant describes how the media mogul allegedly sexually assaulted her.

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

KEILAR: Happening now: A federal court has blocked the crown jewel of President Trump's economic agenda, his sweeping global tariffs.

But one of his top aides calls it a hiccup. The Trump administration appealing a ruling by a three-judge panel that struck down most of Trump's tariffs. The court ruled that Trump doesn't have the authority to use 1970s era emergency legislation to impose the tariffs.

Kevin Hassett, the head of Trump's National Economic Council, downplayed the move.

(BEGIN VIDEO CLIP)

KEVIN HASSETT, DIRECTOR, NATIONAL ECONOMIC COUNCIL: First, we're going to see what happens on appeal. And we're very confident in our success there. The fact is that there are things that we could -- measures that we could take with different numbers that we could start right now.

In the end, people know President Trump is 100 percent serious. And they also have seen that President Trump always wins.

(END VIDEO CLIP)

KEILAR: Let's go live now to CNN's Alayna Treene, who is at the White House for us.

And Alayna, Hassett is saying the ruling doesn't affect ongoing trade talks.

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Yes, that's right.

And we will see if that's actually the case here, because, of course, depending on what the courts ultimately decide, these other countries could determine that it might be better to hold off and see what actually happens with these tariffs before striking into a more permanent agreement with the United States.

But look, we also have heard now not only from several Trump advisers who I have been talking to who have reiterated this, but we heard the Justice Department essentially say that, if the lower courts do not pause this ruling and allow his tariffs to continue to be in effect, they are willing and eager to bring this fight immediately to the Supreme Court.

And, again, that's really echoed what I have been hearing from -- in my conversations with top Trump administration officials and White House officials all morning, which is that they believe that they will be able to win on their appeal, which they filed immediately after this panel of judges ruled that they believe the president does not have the authority -- or at least he did not use the right authority to impose these tariffs.

Now, a key thing as well that we kind of heard Hassett talk about in that interview was this question of whether or not they might try to reclassify some of these tariffs, so that they fall into the right category.

So, for example, this ruling from the United States -- or the U.S. Court of International Trade essentially said that, because the president tried to go around Congress and impose these tariffs by declaring a national economic emergency, his tariffs that were announced on -- quote, unquote -- "liberation day,' the reciprocal tariffs, of course, as part of that, his tariffs on China and Mexico and Canada, all of those have been paused.

But some of the other tariffs, including the ones that were on steel and auto imports, those were classified under a different law. And so, those are not impacted by this ruling, all to say Hassett admitted that there have been some discussions about maybe trying to do something like that, depending on how the courts ultimately decide on this.

But, for the moment, they do believe that they will be able to win this appeal, potentially even bringing it all the way up to the Supreme Court, Brianna.

KEILAR: And Trump met with Fed Chair Jerome Powell, Alayna. Tell us about that. TREENE: Yes, a surprising meeting, given how much we know that the president has you know -- his rhetoric towards Jerome Powell has never been that friendly, particularly what we have seen in recent weeks.

But look, the president has also said that he does -- he did not believe that he would try to move to replace Jerome Powell or try to oust him from the role, again, even though Jerome Powell is operating at an independent agency. The Federal Reserve is operating independent from the White House, of course.

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But the president has previously said he has no plans to do that, despite continuing to disparage him and kind of criticize him for not agreeing to lower interest rates in the United States.

So, interesting to hear what might have been discussed during that meeting. Just moments from now, Brianna, we are going to hear from White House Press Secretary Karoline Leavitt. I am sure the substance of that discussion is going to come up during that briefing.

KEILAR: No doubt.

Alayna Treene, thank you live for us from the White House -- Boris.

SANCHEZ: Joining us now to discuss the latest headlines, Nobel Prize- winning economist Paul Krugman. He's also a distinguished professor at the City University of New York, and he writes the Paul Krugman Substack.

Paul, thank you so much for being with us.

So, the court here agreed with your reading that Trump invoking emergency powers as the basis for these tariffs was unlawful. The administration, though, argues that tariffs have brought countries like China to the negotiating table to address real issues with global trade.

Do you think that this ruling hampers the administration's leverage to address those issues with Beijing?

PAUL KRUGMAN, ECONOMIST, CITY UNIVERSITY OF NEW YORK: Sure.

And, by the way, it's not at all clear that the issues are real. I mean, the White House keeps on changing its story about why it's imposing tariffs. It's fentanyl. No, it's jobs. No, it's bilateral trade imbalances.

The main thing to say here is, tariffs are taxes. They are a form of tax. Normally, we think of taxes as being something that you have to get legislation from Congress. Now, we have in the law certain special circumstances under which the White House has considerable discretion to impose tariffs.

There are emergencies. There are special kinds of national security issues. The question is, does anything that we actually see out there in the world justify invoking those sorts of emergency, exceptional policies? And the court ruled and said, we don't see it. We have 4 percent unemployment, 2.5 percent inflation.

Where is the economic emergency that allows us to rip up 90 years of trade negotiations and completely impose a different regime? And that's a very hard thing to come back from. It's not an argument that the White House can easily win, because they have been invoking an emergency that, as far as anybody else can tell, doesn't really exist.

SANCHEZ: Now, supporters of the tariffs would argue that, while the economy may not be in crisis, the global trading system is. How would you respond to that?

KRUGMAN: Well, it's hard to say that there's a crisis.

I mean, there's a lot of bilateral imbalances. I know we buy more from some countries than we sell to them. But I buy a lot more from the grocery around the corner than they buy from me. As far as I know, they don't subscribe to my Substack. So those kinds of bilateral imbalances are just normal. They're not something to be upset about.

And, yes, the U.S. runs an overall trade deficit, which is the flip side of the fact that foreign investors put a lot of money into the United States. Overall, the U.S. balance of payments balances. We sell as much in the way of assets as we buy in the way of goods. So there's no obvious crisis here.

You can say, well, I wish things were different, but there's a big difference between saying, I would like things to be somewhat different from the way they are and saying that we are going to invoke extraordinary emergency economic powers. And the courts basically said, hey, we don't get it. Where does that authority come from?

SANCHEZ: The administration seems confident that this is going to be overturned. Trump economic adviser Kevin Hassett said as much, what happens if the administration actually wins that appeal?

KRUGMAN: Well, if they win the appeal, then we're back to where we were.

I mean, this all came as a surprise to most of us. We thought that -- I thought we -- I thought that the administration was fundamentally pursuing illegitimate policies, but I didn't think anybody was going to call them on it. And maybe that will be the end result. But that -- I have to say, that does not look likely.

What looks more likely is that they will try to find work-arounds, that they will invoke Section 232 and all of these other things that give them ways of imposing tariffs that don't require declaring a national emergency. But those are actually very imperfect substitutes. They get the administration a lot less leeway and, in particular, a lot less ability to strike deals with other countries.

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I mean, this is a huge blow to the administration's negotiating position.

SANCHEZ: I wonder, as markets rallied in response to this news, whether, given the fact that, as you noted, the administration is likely to seek other avenues to continue conducting this trade war, whether you think markets may have been premature in judging the outcomes?

KRUGMAN: Oh, if anything, I would say that the market reaction was pretty muted, considering that we have just -- basically, the court just eviscerated more than half of Trump's tariff agenda.

Now, maybe not all of that sticks, but the rise in markets was actually pretty modest, given that markets were implicitly saying we think that one way or another, Trump is going to manage to get most of what he wants anyway. And for what it's worth, always dangerous to say that, but I think the markets are probably wrong.

I think this is a much bigger blow to the Trump agenda than the markets are yet factoring into account.

SANCHEZ: Paul Krugman, always great to get your perspective. Thank you so much for joining us.

KRUGMAN: Thank you.

SANCHEZ: Brianna.

KEILAR: Some good news if you are looking to buy a home, an early sign that the advantage is shifting to buyers right now, a new analysis by real estate company Redfin showing home sellers now vastly outnumber buyers by nearly 500,000. That's the widest margin in 12 years.

And that could be a sign of a slowdown starting in the housing market, though prices are still near record highs and mortgage rates are near their highest in 15 years.

CNN business correspondent Vanessa Yurkevich is with us now with some details on this.

And, Vanessa, does this mean the bidding wars of the past few years may finally be over?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, we are not in those COVID era bidding wars.

And this largely suggests that buyers have a little more wiggle room when making offers on homes, and, as you said, 500,000 more buyers than sellers. That is a huge gap not seen since 2013. That is 37 percent more sellers than buyers out there. Just a year ago, that number was about a 6.5 percent gap.

And two years ago, buyers actually outnumbered sellers. And look at where exactly you're going to get the -- and look -- actually, look at the line chart right now. You can see, at the end of April there, you can see that huge uptick, the red line denoting sellers, just that huge gap in how much more inventory is out on the market.

Where you can potentially get a good deal, most of the biggest gaps between the amount of homes in the market and the amount of buyers looking are in Florida, actually. If you take a look, Miami, you can get some good deals, West Palm Beach, Fort Lauderdale. You do have Austin, Texas, in there as well and then Jacksonville.

But, as you mentioned, there are some things working against buyers right now. Home prices are really at record levels. The highest home price on record, the average home price, is $414,000 in the month of April. That's up 2 percent from the year before. And that now marks 22 consecutive months of year over-year-price increases in home values.

Also working against buyers, mortgage rates may make it cost- prohibitive for people to finance any home that they want to buy. You have mortgage rates, look at that, ticking up almost close to 7 percent. Mortgage rates have really been on a rise since September of last year and have been flirting with that 7 percent line.

But this really signals, Brianna, essentially that buyers may be a little more cautious about throwing their hat into the game to buy a new home because of recession fears, uncertainty with tariffs, uncertainty with prices. There's certainly more inventory to go for. But it looks like the buyers just aren't going for it right now.

KEILAR: Yes, because any buyer who's been priced out of the market, Vanessa, is saying, yes, it's totally good news, if you don't account for how much money I have to borrow and the interest rate that I have to borrow it at.

YURKEVICH: Right. Sure.

KEILAR: So what about any impact to home prices? Could we see that with this?

YURKEVICH: They -- so the -- Redfin is actually saying that they do expect home prices to fall about 1 percent on an annual basis. And that is because you don't have as many buyers entering the market.

And then you have sellers that will probably have to decrease the price that they're selling their home for. So, 1 percent, is that good enough for a buyer who, as you said, has been sitting on the sidelines because of a higher mortgage rate or a high price of a home?

One percent isn't a ton, but it could move the needle for some people who are really just looking for that sort of perfect price point and have been just waiting for it to hit that level, Brianna.

KEILAR: Yes, no doubt there are those folks out there.

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Vanessa Yurkevich, thank you so much for that report.

Celebrations happening on campus and in the courtroom for Harvard, graduation ceremonies under way, as the school's lawyers score a at least temporary legal win for international students.

Plus: a major escalation of tensions. Secretary of State Marco Rubio says the U.S. will aggressively revoke visas of Chinese students -- ahead, how Beijing is responding.

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SANCHEZ: A major ruling to tell you about today on the Trump administration's effort to keep international students out of Harvard University.

The judge in that case is ordering the State Department and DHS to not make any changes to the school's student visa program. The ruling came down at the same time that students and families were gathered on campus for commencement ceremonies.

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CNN's Paula Reid is live to bring us the latest.

So, Paula, walk us through what happened in court and what this means for the legal fight, because this isn't over.

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: No, Boris, this is far from over.

But, today, a federal judge in Boston made it clear that she wants to continue this block on the Trump administration's effort to try to revoke Harvard's student visa program. Now, this would jeopardize their ability to have international students on campus, because, if you come here from another country to attend school, you have to be enrolled in a school with a valid student visa program.

The school has begun litigation and they have argued that this is a violation of their constitutional rights, including free speech. Now, this hearing today, this was high-stakes. And it was nearly derailed late last night when the Justice Department served a notice to Harvard, saying that it was going to begin this process.

And that notice kicked off a 30-day period giving the university an opportunity to respond. Now, that's the kind of procedural stuff that happens every day in federal court, would -- had the potential to derail today's hearing. And it appeared to be that was the Justice Department's goal. The judge, though, was having none of it.

She said she did not want to delay and leave this larger question open. So she said she was going to continue a temporary pause on this policy, saying -- quote -- "I want to maintain the status quo." But she wants to impose a permanent pause while this case continues.

And she's asking both sides, so the Justice Department and Harvard, to work out what that should look like, saying -- quote -- "It doesn't need to be draconian, but I want to make sure it's worded in such a way that nothing changes."

So that will be in place while these larger questions about whether this is constitutional play out in court over the next several months. And, of course, this is just one of the many ongoing battles between the administration and the university over everything from funding to DEI -- Boris.

SANCHEZ: Paula Reid, thank you so much for the update there.

CNN's Danny Freeman actually on Harvard's campus for us. He was there covering this morning's commencement, which just wrapped a short time ago.

And the mood, at least from the video, Danny, seemed festive.

DANNY FREEMAN, CNN CORRESPONDENT: Yes, you know, it's interesting, Boris.

I think, when we began the morning, literally and figuratively, it was cloudy out here at Harvard. This ongoing battle with the Trump administration really was looming large over not just commencement, but also the week, but, as you noted, Boris, and really as graduates keep spilling out of Harvard Yard into the streets here in Cambridge, really a celebration of these graduating students and of Harvard University as a whole really has taken over, I think, the majority of the day.

And, frankly, we saw that just as commencement was starting. We saw the president of the university, Alan Garber, who's really been the face of this resistance against the Trump administration. When he came on stage right at the beginning there, he was greeted with about a minute standing ovation, which was pretty remarkable to see during the commencement ceremony.

And I will just note, he also said at one point when he greeted the class of 2025, he said, from down the street, across the country and around the world, and noted around the world, he paused there and said, "just as it should be," and also got a tremendous round of applause.

That's really captivated, I think, the tone of the day here. But, again, while there weren't a lot of direct references to President Trump or the administration, it was still very front of mind up there during commencement.

I want you to take a listen to how one student characterized it as he was speaking today.

(BEGIN VIDEO CLIP)

THOR REIMANN, HARVARD GRADUATE: With Harvard at the center of a national battle over higher education in America.

(CHEERING)

REIMANN: Now, look, our university is certainly imperfect, but I am proud to stand today alongside our graduating class, our faculty, and our president with the shared conviction that this ongoing project of veritas is one worth defending. (END VIDEO CLIP)

FREEMAN: So, again, not necessarily mentioning President Trump by name or name-checking the Trump administration but acknowledging this large battle that is going on.

But you could hear from the cheers, not only during that speech, also throughout the commencement, this ultimately ended up being a celebration of Harvard University, though I will note, as Paula noted, this ongoing story is not over yet, and, especially for international students who are hoping to return in the fall, still a lot of questions -- Boris.

SANCHEZ: Danny Freeman live for us in Cambridge, thanks so much -- Brianna.

KEILAR: As the administration is engaged in this battle with Harvard, the U.S. State Department is also now saying that it will aggressively revoke student visas for people coming from China.

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This announcement could jeopardize efforts to de-escalate tensions between the two countries. China is slamming the move, calling it politically motivated and discriminatory.

CNN's Kylie Atwood is with us now.

Kylie, what's behind this decision?

KYLIE ATWOOD, CNN NATIONAL SECURITY CORRESPONDENT: Well, the secretary announced this last night.

It was kind of a sudden announcement. It obviously comes as we're looking at a wide swathe of things that the administration is doing against students here in the United States from international countries, from all around the world.

But specifically when it comes to China, they're narrowing in and saying that they're aggressively going to be revoking the student visas for Chinese students in two specific categories, including those who are affiliated with the Chinese Communist Party and those who are here studying in critical fields.

But they didn't actually define what critical fields are. And, obviously, there are many who are questioning what this is actually going to look like in practice. So we're watching to see how this policy is actually going to be implemented. But we should note that it comes on the heels of this trade tension between the U.S. and China, which cannot be ignored at this moment in time.

And, also, it comes as the administration has been working to aggressively curate wide -- in a widespread way what the students are like in the United States. And just earlier this week, the State Department announced that they're going to be putting a halt on all new students applying for visas in the United States their appointments for those applications.

So what that means is that anyone who wants to come to the United States in the fall, is planning to enroll in universities now isn't going to have an appointment until they actually go in and bolster what they're saying are their social media vetting policies.

So, we're going to watch and see what happens there. But across the board, there's a lot of questions about how these policies that they have rolled out just over the last week are actually going to be implemented and what it'll look like for higher education here in the United States.

KEILAR: All right, Kylie Atwood, thank you so much for that.

And still ahead: A former assistant of Sean "Diddy" Combs takes the witness stand, detailing the multiple times she says she was sexually assaulted and the toxic work environment that she endured.

Her emotional testimony is next.

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