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Second Federal Court Rules Against Trump Tariffs; U.S. District Judge Says Tariffs Under Emergency Powers Act Are Unlawful; Fed Chair Jerome Powell Meets Donald Trump in the White House; Judge Hears Arguments as Harvard Fights to Keep International Students. Aired 2- 2:30p ET

Aired May 29, 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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[14:02:04]

BRIANNA KEILAR, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": From commencement to the courtroom, Harvard University sends off its graduates as it fights the Trump administration over government contracts and international visas, what a judge says she will order the Department of Homeland Security and the State Department to do. And another day, another roundabout in the global trade war, the Trump administration says it will go to the Supreme Court, and the second court just ruled the president's tariffs on worldwide trade are illegal.

BORIS SANCHEZ, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": And witness in the Sean "Diddy" Combs sex trafficking and racketeering trial takes the stand under a pseudonym, describing his mood swings that she says often turned violent. We're following these major developing stories and many more, all coming in right here to "CNN News Central."

KEILAR: We have breaking news. A second federal court just ruled that President Trump overstepped his authority when he invoked that 1970s era emergency legislation to justify sweeping global tariffs. The ruling is coming just a day after a federal trade court made a similar finding that blocked most of Trump's tariffs. The administration is now threatening to take the case quickly to the Supreme Court if an appeals court does not find in its favor. CNN Chief National Affairs Correspondent Jeff Zeleny is with us now. What's the White House saying here, Jeff?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Brianna, understandably, the White House is not pleased by this. They have quite a bit of practice at this now. We have seen so many legal cases, so many judges stepping in, really over the last several months. But this is a very specific ruling. Of course, this is at the heart of the Trump administration's economic agenda. It's the -- these tariffs are designed to pay for his budget bill, if you will. So that's why this is hitting so close to home.

But just a few moments ago with the White House press briefing, the White House Press Secretary said this about the courts.

(BEGIN VIDEO CLIP)

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: The courts should have no role here. There is a troubling and dangerous trend of unelected judges inserting themselves into the presidential decision making process, but ultimately, the Supreme Court must put an end to this for the sake of our constitution and our country.

(END VIDEO CLIP)

ZELENY: The law, of course, is a pesky thing, a challenging thing. The White House would, wish it was not there, but that is not the case. So Brianna, we have seen so many examples of this, where judges have weighed in. And this latest ruling just coming this afternoon on the heels of last night's ruling, likely sends this to the appeals court for sure. But the Supreme Court may get the final word on this. But again, the reason this is so much different than some of the other rulings, this sits at the very heart of what the Trump administration wants to accomplish in terms of paying for its economic agenda, et cetera. So this is a huge hurdle for this White House.

KEILAR: They do like the unelected judges they do when they rule the way they want them to rule though, we should note. We're also learning some new details about Trump meeting with the Fed Chair, and there's been some acrimony certainly from President Trump towards Jerome Powell. How'd this go?

[14:05:00]

ZELENY: It is very interesting. I mean, the Chairman of the Federal Reserve, Jerome Powell, had an unscheduled meeting, at least it was not on the president's a public schedule this morning. They met for an undetermined amount of time. The Federal Reserve put out word of that meeting right after it happened, saying that, that they had a civil conversation with the president. But just at the White House Press briefing, Karoline Leavitt said the president once again expressed his dissatisfaction, I guess if you will, at the Fed for not lowering interest rates even more.

But of course, this is an independent agency, so it is somewhat unusual for them to have meetings. But, the president certainly has been railing against Jerome Powell for a long time. The bigger point here is, he was threatening to fire him several months ago. We've not heard that in recent time, but was that something privately discussed, a resignation perhaps, we don't know. But, an unusual meeting in the Oval Office. I'm sure we'll hear more about it from the president if he takes questions later today.

KEILAR: All right. We'll be looking for that. Jeff, thank you. Really appreciate it. Boris?

SANCHEZ: Let's get some legal analysis now from CNN Legal Analyst and Former Assistant U.S. Attorney for the Southern District of New York, Elie Honig. Elie, great to share an afternoon with you, as always. We have these two court rulings against President Trump's use of emergency powers to justify these tariffs. Are there any differences in what these judges decided?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Yeah, Boris, another day, another decision. Same result, essentially, but through slightly different paths to get there. So, yesterday's ruling was a lawsuit brought by a conglomerate of states and trade associations. It was heard in the Court of International Trade, which is a federal court that specializes in international trade matters.

The ruling from that three judge panel was that this law that Donald Trump used to pass the tariffs, the International Emergency Economic Powers Act, does not apply to the situation here because the court held we're not in an international economic emergency. Having trade deficits, something we've had for 40 plus years, does not count as an economic emergency. Now, separately, the ruling that just came down, this was in a narrower lawsuit brought by two individual plaintiffs.

They're both U.S.-based toy companies that import most of their products from China and from Asia. They sued in the D.C. Federal District Court. It gets a little messy, but this is a separate lawsuit. And this judge found that that same law, the International Economic Emergencies Act, it doesn't apply to tariffs at all. It doesn't even give the president the right to pass tariffs at all, regardless of whether there's an emergency or not. So, we end up in the same place on both cases, Boris, which is that two different federal courts have now found that what Donald Trump did was illegal.

SANCHEZ: In the more narrow lawsuit in D.C., the judge there said that the Court of International Trade ruling could "be overturned or delayed." So, he ordered the two companies should be protected from the tariffs regardless of the ultimate fate of the International Trade Court's decision. Walk us through exactly what that now means.

HONIG: Yeah, so we now have two rulings from the district courts, which are both trial level courts. Both of those have been or will be appealed by the Trump administration. We just heard that from Zeleny in the last segment, because they lost. And so, they're both going to be proceeding on appeals, but they might be proceeding on different timelines. Sometimes one appeals court will move more quickly than the other. And so, what the judge tried to do today is say, I don't want to leave a gap where perhaps the decision from yesterday gets overturned and therefore these plaintiffs, these toys companies could lose in the process. So I think both judges, the sets of judges in the International Court and also the D.C. court are trying to make sure that the plaintiffs are protected against any whims in the schedule.

SANCHEZ: What would you see, Elie, as the main argument for the Trump administration for overturning these rulings? I mean, they would essentially have to prove that there's some kind of economic emergency, some national emergency forcing the president to enact these kinds of tariffs?

HONIG: So, I think it's going to be a two-pronged argument. The first one we just heard Karoline Leavitt say in that clip that we just played, which is they will argue that legally, there are certain things including imposition of tariffs and judgments about international economic emergencies that are given over to the president and the president alone, and cannot be reviewed by the courts. There are some laws that actually give some powers to the president and say they cannot be reviewed by the courts. This doesn't happen to be one of them.

And then I think the second argument that they will make is that this is in fact an economic emergency and that Donald Trump was acting reasonably improperly when he said it is an economic emergency. But again, both of those arguments are over too (ph) so far.

SANCHEZ: This is ultimately headed for the Supreme Court, almost certainly, isn't it?

[14:10:00]

HONIG: Oh my gosh, let's hope so, because as you can see, it's already a procedural mess. The very reason the Supreme Court exists is, first of all, to rule on major issues like this one, but second of all, to give us national unity and clarity because it becomes a complete mess for all the participants, for our markets, if you have different judges issuing different rulings based on different rationales. So, I think today's ruling just -- it further increases the chances that this does end up with the Supreme Court sooner than later.

SANCHEZ: Elie Honig, appreciate the point of view. Thanks for joining us.

HONIG: Thanks, Boris.

SANCHEZ: Brianna?

KEILAR: And Robert Armstrong is with us now. He is the U.S. Financial Commentator for the Financial Times. So Robert, this second ruling against Trump's tariffs, how are you seeing this?

ROBERT ARMSTRONG, U.S. FINANCIAL COMMENTATOR, FINANCIAL TIMES: Well, what I would emphasize is that this may not be a political defeat for the Trump administration, the way that it is a legal defeat. The important context here is that these tariffs are very stupid and destructive economic policy that would've hurt the country, hurt the stock market, hurt the bond market, and hurt Americans. So now, Trump has sort of had these policies taken away from him and left to just play the tariffing president on TV.

He can say the wicked woke courts stopped me from doing this wonderful policy that would've saved the country when in fact, while there is no economic emergency now, there would've been one if these tariff policies had gone through as originally proposed. So this could be, in a strange way, an ideal world for Trump.

KEILAR: You're saying the courts saved him from himself?

ARMSTRONG: Himself, that is exactly the point. He -- these are terrible policies and the reason he likes them is that they play well on television. Where they would play badly is in the actual economy. So, if he can posture as the tariffing president while being stopped from actually imposing these destructive tariffs, that might be the best possible world for him.

KEILAR: I do wonder how America's trading partners are going to see these decisions. You have Kevin Hassett on Fox Business this morning, top economic aide to the president, saying the court decisions are not going to impact trade deals that are currently in the works. What do you think? How are other countries currently negotiating with the U.S. going to see this?

ARMSTRONG: I mean, the question is how much does the U.S. now cred -- how much credibility does the U.S. now have as a negotiating partner? So you already had the problem that I call the TACO problem, which is that Trump Always Chickens Out. He always goes back on the strong claims he made at the earl -- at the beginning of the negotiations, before the negotiations even begin.

And now, on top of this, negotiating partners see that the U.S. court system does not buy into Trump's basically abrogation of congressional authority. So now, the negotiators are in sort of a doubly weak position thanks to both Trump himself and the courts.

KEILAR: Yeah, you did coin that term TACO Trade, and actually Trump was asked about it in the Oval Office yesterday. He didn't appreciate it, to put it mildly. Let's take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Wall Street analysts have coined a new term called the TACO Trade. They're saying Trump Always Chickens Out on your tariff threats, and that's why markets are higher this week. What's your response to that?

DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES OF AMERICA: I kick out?

UNIDENTIFIED FEMALE: Chicken Out.

TRUMP: Oh, is that chicken out? I've never heard that. We have the hottest country in the world right now. Six months ago, this country was stone cold dead. We had a dead country. We had a country people didn't think it was going to survive. And you ask a nasty question like that. It's called negotiation. Don't ever say what you said. That's a nasty question. Go ahead. To me, that's the nastiest question.

(END VIDEO CLIP)

KEILAR: What did you think, Robert, of his answer to that "nasty question?"

ARMSTRONG: Well, first off, I was horrified to hear the question asked. I never hoped for this joke to enter the president's ear because, of course, his chickening out on this stuff is great news. We should encourage all the chickening out on these idiotic policies we can get. But I think his answer just showed you that the joke hits home. These policies haven't done anything for Americans yet. The negotiations have been -- have not shown the strength of the administration, quite the opposite. And so, the joke rings true and you could tell the president felt that.

KEILAR: Does the court decision make it moot? It doesn't give him the chance to possibly fold on it.

[14:15:00]

ARMSTRONG: I mean, I think the rhetorical strategy around tariffs from the administration will continue. They know they have a winner here in terms of PR. So, there'll be a lot of noise and huffing and puffing about tariffs for the rest of the administration. How much of that gets made into policy is now more open to question than ever. And as your last guest said, it's going to come down to the Supreme Court. And I'm a markets analyst, not a legal analyst, but the legal argument certainly seems strong to me. The legal arguments against the president certainly seems strong to me.

KEILAR: A markets analyst with a sense of humor there. Robert Armstrong, thank you so much. Appreciate it.

ARMSTRONG: Thank you for having me, Brianna.

KEILAR: Still to come this hour. Harvard celebrating its graduation and a temporary win in its courtroom battle against the Trump administration over international visas. The latest just ahead. And in the Sean "Diddy" Combs trial, his former assistant testified he physically and sexually assaulted her multiple times, what more on that testimony. And it's day 13 in the manhunt for the inmates who broke out of a New Orleans jail. Officials are raising the reward for tips as the search intensifies for the two remaining escapees. Well, that and much more coming up on "CNN News Central."

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[14:20:55]

SANCHEZ: With the fate of Harvard's international students in legal limbo, a judge has blocked the Trump administration from making changes to the Ivy League school's visa program. Judge Allison Burroughs telling both sides that she wanted to maintain the status quo as she issued a preliminary injunction. Harvard has faced the brunt of the Trump administration's ideological ire. Just this week, the White House told federal agencies to cancel all remaining contracts with the university.

Despite that, today, students and families came together on campus for an emotional commencement ceremony. CNN's Katelyn Polantz was inside the courtroom for today's critical hearing. Katelyn, what does this order mean for Harvard and obviously, its many international students?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Boris, it means the international students who are planning to come to Harvard for the summer semester, for the fall semester and who are already on campus here, not to worry at this time. They should be able to come to Harvard on student visas. There are 7,000 or so students that this applies to from 140 or more different countries all over the world. The judge made very clear that she doesn't want anything to change with that student visa program that last week, the Trump administration tried to abruptly and immediately revoke. The judge had stepped in then. And then this morning in the federal court in Boston, just across the river over by the harbor, the judge made clear right from the start that what she was doing was keeping everything in place and that she didn't want anything to change.

She also had concern, Boris, that things have changed. That there are students abroad that are running into trouble getting their student visas to come study at Harvard as they go to other foreign embassies of the U.S., U.S. consulates all over the world. But the administration, right now, they're going to be working with Harvard's lawyers. That's part of what the judge is doing right now. She's saying, get together and figure exactly out -- figure out exactly what the legal language will be, so nothing changes on the student visa program indefinitely.

The Harvard lawyers have a lot of firepower. The person in court today was a former U.S. solicitor general arguing for Harvard. There was a huge team of lawyers there. They say they want to make sure there aren't shenanigans. That's the quote from Ian Gershengorn in court. The Justice Department though, Boris, they have tried to diffuse this. This was such a highly anticipated hearing. And just before midnight last night, they told Harvard they were changing course, that they wanted to give them 30 days to work on some administrative procedures to come back to the administration about this program. But the judge wasn't buying that.

This is not a moment where this case goes away. It's a moment where there's now going to be a firm court order on the Department of Homeland Security, the Department of State that blocks them from doing anything that could harm Harvard's student visa program. And then, we will see what happens later if there'll be more discussion in court over Harvard's First Amendment rights and also other cases still ongoing, especially regarding funding for the university. Boris?

SANCHEZ: Katelyn Polantz, thank you so much from Cambridge. Brianna?

KEILAR: With us now, someone who's future depends on that legal battle. Aleksandra Conevska, she's an international student at Harvard. Alexandra, thank you for being with us. And just first, how are you reacting to these decisions, to this judge's decision?

ALEKSANDRA CONEVSKA, HARVARD INTERNATIONAL STUDENT: Obviously, it's good news. It's very -- we're very happy to hear this. But I think in general, there's just this feeling like the story is evolving and this is just one chapter, and it's not clear now, especially since we were looking forward to this. We at least had this benchmark to look forward to. And now, we don't know what will be next. It seems more like the next thing is a wild card and it's unclear how -- for how long our lives will be like this.

KEILAR: Yeah. So for you personally, what's your plan? Do you stay at Harvard? Do you have a backup plan? How are you doing this?

[14:25:00]

CONEVSKA: Yeah, so I'm definitely planning on staying. I'm not planning on leaving the country because I know that if I leave, I might have a hard time being readmitted at the border. But I'm proceeding as usual. Obviously, this involves checking the federal docket and making sure the blocks are still in place. I don't want to end up undocumented unknowingly. But for now, I'm being -- I'm just being committed to my studies and trying as much as possible to live my life as normal as I can, and how it was before all of this madness began. And I guess, for me at least, I'm Canadian. I have, I think, a good fallback option if the worst-case scenario happens, which is not true for all of my peers.

KEILAR: OK. So I mean, that means you're not seeing friends or family, right, that you might normally see. How does that feel? I mean, how does that make you feel?

CONEVSKA: Well, it's a very unsettling feeling. I never expected, like moving just to our friendly neighbor south of the Canadian border that I would feel locked in. But at the end of the day, Cambridge is a very pleasant place. The air is clean, there's water and lots of food. I'm just reminding myself and staying grounded on just how much I love it here. And that's why I want to stay, and that's why I'm not leaving. I don't want to risk not being allowed to come back to this place where my research community is and where I've lived for the last several years.

And so, I think it's obviously a bit disorienting, frustrating, confusing, but it's, at the end of the day, this is the place I've invested in and I would like to remain for at least the end of my degree.

KEILAR: Worst place is to be stuck. That is a good perspective there. I will note, the administration says this is about anti-Semitism. It's about the influence of the Chinese Communist Party. It's about the failure of the university to turn over information about foreign students. But what do you think, why do you think international students are being targeted by this administration?

CONEVSKA: I honestly don't think there's anything that deep here. I think that we are an attractive pawn. I think they have levers that they believe they have levers that they can use to control our lives, make things more difficult for Harvard. And as a result, try to get concessions out of Harvard, try to see Harvard give in to its illegal demands. And so, I think we just are caught in the crossfires of this culture war that the Trump administration is engaging in and it's convenient for them to target us. But I don't think, I mean, they obviously have their, as you noted, the banner of anti-Semitism, but I think we just were something that they felt they could use and they are going to continue to use, I believe, in the coming months at least.

KEILAR: They say -- the administration says that Harvard has turned their once great institution into a hotbed of anti-American, anti- Semitic, pro-terrorist agitators. And it's -- the White House said enrolling foreign students is a privilege, not a right. Have you experienced anything that the White House is accusing Harvard leadership of?

CONEVSKA: I personally have had an outstanding experience at Harvard, not just educationally, but socially in the community. That's here. I am a Jewish student, identify as a Jewish student, and I luckily have not had any personal anti-Semitic attacks. And if anything, I think that this new game they're playing with international students is actually going to make it harder to combat anti-Semitism on campus, somewhat ironically, because now we are seeing Jewish and Israeli students being -- thinking -- considering leaving or potentially thinking that they might get deported.

And that actually fractures a community that has become stronger and has worked very hard, I think, to overcome a lot of the issues that you described that might have been true on campus. And so, it's kind of baffling that they're using us as a way or using that excuse to dictate our lives now. But in general, I think Harvard campus is a very pleasant normal place and very similar to lots of the other places in the United States I've visited.

KEILAR: Aleksandra Conevska, thank you so much. It's really helpful to talk to someone who's in the middle of all of this. Thank you.

CONEVSKA: Thank you for having me.

KEILAR: And happening now in the Sean "Diddy" Combs sex trafficking and racketeering trial, a former assistant is on the stand telling the jury about how she was pressured to do ketamine. We'll have details ahead.

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